The chief executive of The Pensions Regulator has said that it has “some choices to make” on its resource allocation following the implementation of its new risk-based regulatory model.
Speaking to Pensions Age, Lesley Titcomb said that it will be testing its new one-on-one supervisory approach, starting with 25 schemes and eventually moving up to 60, but that in the end it will be “those who guard the public purse” who decide the level of supervision it will be able to enact.
TPR’s regulatory mandate has grown exponentially over the past six years, with the introduction of auto-enrolment, its work with Local Government Pensions Schemes and more recently, master trust authorisation.
Discussing the resources around its new supervisory approach, Titcomb said: “We have some choices to make there, new regulatory model is risk based, so depending on your view of risk and where you want to draw the various risk bars, you will need more or less resource to deal with those and we are still in the process of developing and implementing our model.
“It then depends on where you draw the line, how many of these schemes does our board think we should subject to one-on-one supervision, if it says 75 that gives you one answer in terms of resourcing, if it says 25 that gives you another. In the end you know some of the resource requests will be acceptable to those who guard the public purse and others won’t.”
The regulator’s growing remit has meant its resource has come under scrutiny over recent months, but Titcomb was adamant that it has all been accounted for.
“It is important to say that when we are given new responsibilities by parliament we do work out how much those are going to cost to execute and then we approach the Department for Work and Pensions (DWP) for additional resources to meet that and sometimes you get that and sometimes you don’t,” she said.
“Over the last few years the DWP have responded positively to our requests for additional resources.”
TPR received £84m in grants from the DWP over 2017-18, an £11m increase over the previous year.
Furthermore, Titcomb said that the use of data analytics was one of the “real challenges” facing all regulators in making sure their resources were directed as effectively as possible.
“It’s what the police forces used to call intelligence led policing,” she added.
“It’s about getting that intelligence and to direct your resources as a result. All regulators are by necessity resource constrained, you can’t do everything you would like to do and you can’t regulate all risk out of the system. So how do you pick where you put your resource?”
Last month, TPR appointed Jo Hill as executive director of strategy and risk from the Financial Conduct Authority to deliver the regulator’s more proactive oversight on “higher-risk schemes”.
Last week it was announced that employees from the FCA and Prudential Regulatory Authority would be seconded to TPR to work on the master trust authorisation programme, however Titcomb played down any idea that it was due to lack of resource.
“I should stress that is not new. We have been seconding staff to and from the FCA and other regulators for a long while. The statement I made about seconding people to work on master trust authorisation is not unusual in the slightest, given that the FCA and PRA operate authorisation regimes,” she said.