The Pensions Regulator’s budget has increased by £3.5m for 2017-18 when compared to its original planned budget for the year, due to its need to implement the master trust authorisation regime.
The figure has been approved by the Department for Work and Pensions and will result in an increased spend of £7.9m for 2017-18, compared to the previous year. The regulator’s chief executive Lesley Titcomb called for a need to “invest in our systems” and to enhance the number of people on its frontline regulatory teams, as well as specialist advisers who support them.
As part of this, in its corporate plan for 2017, the regulator has set out its goals, priorities and risks that it needs to focus on. After criticism from the Work and Pensions Committee over its response to the BHS pension scheme, the regulator’s goals include intervening more frequently and acting quicker.
In a change from last year, it has refined its priorities down to eight from 10 as a result of focusing on five risk areas. These risks include poor outcomes for members and sponsors of smaller DB and DC schemes that cannot benefit from economies of scale; standards of governance and administration not increasing at the pace required to meet expectations; potential failure of master trusts and defined benefit schemes; the impact of poor record-keeping in both public and private sectors; and, variable investment conditions arising from political and market uncertainty in the UK and overseas.
As a result of these its priorities are to successfully complete the remaining stages of the roll-out of AE to small and micro employers; deliver more interventions, more quickly, where defined benefit schemes are underfunded or avoidance is suspected; and, protect customers through the effective regulation of master trusts.
It also aims to drive up standards of record-keeping and data maintenance, including public service schemes; be clearer in our codes, guidance and other interactions with schemes and employers about what we expect them to do; drive up standards of trusteeship across all schemes, with a particular focus on chairs and professional trustees; develop and implement our enhanced approach to regulation; and, create high performing teams of people across TPR with the skills and capabilities to deliver all of the above.
Commenting, Titcomb added: "These priorities show how we are evolving to become a bolder, more effective regulator. Going forward we will be intervening more frequently and acting faster. Workplace pension schemes play a vital role in the retirement plans of millions of people and we have an important role in protecting their benefits.
"Effective regulation is essential to protect the benefits of members of occupational pension schemes and in recent months we have demonstrated we will use the powers available to us. Elsewhere, our corporate plan clearly sets out the importance we place on the quality of trusteeship and how we will work to simplify the guidance and codes we provide to the industry. In addition, the continued successful implementation of automatic enrolment and the increased protection for consumers in master trust schemes remain top priorities."