Sivyer: We’ve had to radically rethink our plans
The Pensions Regulator (TPR) is set to increase its engagement with pension scheme administrators in light of the Covid-19 pandemic.
Speaking this morning at PP’s Deskflix event on the future of defined contribution, TPR policy principal Louise Sivyer revealed the regulator plans to “continue developing one-to-one relationship supervision with significant schemes and increase our engagement with administrators”.
She said: “Already this year we’ve engaged with pension scheme administrators undertaking the day-to-day running of schemes for many millions of members to understand how they are responding to the pandemic and we want to keep that engagement going.”
Despite regulatory initiatives remaining paused for the meantime, Sivyer revealed they will be restarted “when it is appropriate to do so” or new ones will be launched when TPR “thinks the risks have changed”.
She noted: “The vision remains that the future of occupational schemes is one where all savers are in schemes that have excellent standards and deliver good value. Over time this means having fewer but better run schemes. A key theme will be the consolidation of defined contribution schemes and value for money within those that remain.”
In her overview of TPR’s plans for the rest of this year and how the plans have been adapted in light of the Covid-19 pandemic, Sivyer noted: “TPR and those we regulate need to be alive to the risks this will undoubtedly present and be prepared to respond accordingly.”
She added: “As the Covid-19 crisis was building and just before lockdown, we had been preparing to publish our corporate plan for 2020 going into 2021.
“We’d intended to announce a range of new regulatory initiatives to set out how we’d continue to extend our regulatory grip, to explain our plans for implementing a range of legislative changes and to trail the launch of our new corporate strategy… but we’ve had to radically rethink our plans.”
She added: “We’ve revised our plans to respond to the challenges of the pandemic that we’re likely to face for the foreseeable future.”
For the first few months of the crisis, Sivyer explained the regulator “adopted a more flexible approach to reporting and we put in place easements to allow trustees and administrators to focus on the critical tasks of scheme governance and ensuring payment of benefits”.
This included providing guidance for savers to protect them from scams and to prevent them from making rushed, irreversible decisions about their pension savings they might later regret; providing guidance for trustees in relation to a range of issues during the crisis for example handling requests for extensions to deficit repair contributions; and also looking at putting in place easements around reporting requirements for trustees and employers as well as in respect to its regulatory response and enforcement in relation to breaches of the law.
She revealed: “Those easements were largely removed from the beginning of July as we moved from responding to the immediate impact to needing to build a fully informed picture including trends in the various breaches of law… We also set out how we will approach any breaches of the law during the pandemic including any action we will take.”
Focus remains on saver risks
Sivyer added that in light of the Covid-19 pandemic, the regulator’s focus “does remain on addressing the risks to savers and making clear how those we regulate can look after those valuable savings”.
During the pandemic, TPR has worked with the Department for Work and Pensions (DWP) and the Pension Protection Fund to look at longer term implications of Covid-19 on pension schemes and a revised corporate plan has now been published, which sets out priorities for the year in light of the risks that the pensions industry, employers, and savers face.
The overarching message here, Sivyer said, is that “TPR will take a pragmatic approach when deciding on a course of action in relation to a breach and we’ll take into account the impact of Covid-19 as a factor in our decisions”.
“However we have set out more specifically our approach in relation to certain breaches for example chairs statements and preparation of statements of investment principals,” she noted.
Sivyer also outlined the regulator’s plans for the rest of the year including its plan to consult on its single code of practice – which brings all of its codes of practice into one making them much easier to use and understand – later in the year, and plans to drive the required standards of administration that will support the implementation of the pensions dashboard.
Additionally, the timeframe for responding to TPR’s consultation on the principals for the new defined benefit funding code has been extended until September so the regulator will carry out a full consultation on the draft code after that, with the aim of it being enforced in 2021.
The regulator is also urging trustees to read and respond to the DWP’s call for evidence on a review of the charge cap.
Watch Louise Sivyer’s presentation in full here
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