The Work and Pensions and Business, Energy and Industrial Strategy committees have expressed their disappointment into The Pensions Regulator’s key performance indicator (KPI) targets for the regulation of defined benefit schemes.

The regulator’s corporate plan was published earlier this month, and revealed its plans to gain the respect of employers, trustees and other stakeholders.

In a letter from the committees published today, 22 May, the chairs Frank Field and Rachel Reeves, wrote to TPR’s non-executive chair Mark Boyle as part of its inquiry into the collapse of Carillion. Although they thanked the regulator for its cooperation, and acknowledged that TPR has prioritised more proactive regulatory work, it was unhappy with its corporate plan, published earlier this month.

“We were disappointed, however, that in your latest corporate plan, released on 11 May, the target KPIs for DB regulation appear very modest in scope…all the KPI targets remain unchanged from 2017-18. Should the Regulator not be pushing for more stretching targets?” the letter asked.

For example, the proportion of assessed DB scheme risk it has engaged with during the last three years was 70 per cent for 2017/18 and remains the same for 2018/19. It is the same for the number of schemes it proactively engages with ahead of a formal valuation, which is 90 per cent for both years.

Earlier this month, the committees published a damming report on Carillion, in which it said it is “far from convinced” that TPR’s current leadership can effect change, and that it was “deeply concerned” with evidence it received from the regulator.

Furthermore, the committees said that a “substantial cultural change” is required for the regulator to be able to meet its goal of being “quicker, bolder and more proactive”. In particular, it said a “tentative and apologetic approached is ingrained” and they are not convinced that TPR’s current leadership is equipped to effect change.

“We are aware that Lesley Titcomb’s role as chief executive will be up for renewal in March 2019, and any appointment or reappointment will need to be approved by the Secretary of State [for Work and Pensions]. In evidence to us, the current Secretary of State confirmed her desire to see a regulator that is ‘tougher, clearer, quicker’.

“Could you set out to us how the board intends to evaluate the performance of the current chief executive before March 2019, and what the criteria will be for appointing or reappointing the next chief executive?”

In addition, Field and Reeves noted their wish for their findings to be “acted on with greater urgency” this time, as “previous large corporate collapses have led to promises of action from government and regulators that have then failed to materialise quickly”.

“There is also considerable public interest in swift accountability for those responsible for the company’s collapse. We would therefore be grateful if you could update us on the status of your anti-avoidance investigation into Carillion’s directors and set out a timetable for each, including when you expect to report,” it read.

The committees have also invited the regulator to comment on the other conclusions and recommendations in the report that are relevant to them. The committees hope to publish the responses from the regulator and other bodies in a special report before the summer recess.

In response, TPR Chair Mark Boyle said: “TPR is a very different organisation from five years ago – we have become clearer, quicker and tougher and we are implementing an ambitious programme of change that is transforming the way we work.

“We have completed a wholesale review of how we regulate under our TPR Future programme - we are intervening more quickly and decisively. We have recovered more than £1bn for defined benefit schemes, with the largest settlements over the past two years in the BHS (£363m) and Coats (£329m) cases. Only last week the courts found that TPR was right to pursue anti-avoidance action against ITV to secure financial support for pensioners.

“We are implementing a new supervision regime for Master Trusts so people can save with confidence, and we have seen 9.6m more people start saving due to our successful delivery of automatic enrolment. We are moving to use our powers more quickly and over the past year have successfully pursued seven criminal prosecutions. Tougher powers in the Government’s White Paper will strengthen our ability to clamp down on company bosses who put pension savings at risk. We look forward to talking to the committee about our work as part of its ongoing inquiry.”

Share Story: