The Pensions Regulator (TPR) is preparing to launch a “big initiative” in the next few months focused on whether commercial master trusts should be required to include member-nominated trustees (MNTs), TPR interim executive director of market oversight, Julian Lyne, has revealed.

Speaking at the Pensions Age Northern Conference, Lyne said: "We are doing a big initiative in the next few months looking at that very aspect in terms of trusteeship."

Lyne emphasised the importance of employee voice and diverse thinking in pension governance, stating: "We really value the role of a member-nominated voice in the governance structure and there are various options that you can look at.

"But I think as a regulator, we understand the trustee boards need to be clearly informed, they need to have diverse thoughts and we appreciate the value of a members feeling connected to their pension."

Lyne also said that the pensions industry is entering a “critical chapter”, moving beyond simply helping people save, toward building a fully holistic pensions system.

He suggested that this “next phase” will help deliver greater access to data, the opportunity for greater sophistication and ultimately better outcomes for savers.

In particular, he emphasised the role of the Pension Schemes Bill in this, suggesting that it will “fundamentally change the market”, a change which he argued is “needed”.

Lyne said TPR knows that many defined benefit (DB) schemes are in endgame territory, and defined contribution (DC) schemes are becoming the “norm”.

He said that while it is a “testament to the success” of auto-enrolment that eight in 10 workers now save into a workplace pension, the industry must not lose sight of the fact that DC schemes are still in their infancy.

Lyne pointed out that 12.5 million savers are still at risk of inadequate retirement income, which he called “so much more than a statistic” and is millions of people enduring anxiety and hardship in their later years.

He also acknowledged the challenge of decumulation calling it “stressful” and “opaque”.

“Without a high level of financial literacy, savers who have been used to being pretty passive when it comes to pensions, have little hope of navigating the transition to retirement,” he said.

Additionally, Lyne highlighted that a lack of data and transparency means that savers have not always received the best value for money.

“So, change is needed,” he added. “The government has given us guardrails and a timeline for that change.

“And now, as regulators, trustees, administrators and the industry at large, we must make sure that when people entrust us with their hard-earned savings – we make that money go as far as it can and suitably support them with their retirement decision-making.”

Lyne said that TPR wants to make it easier for schemes to adapt to the changing landscape and support the industry, ensuring savers have enough money for a dignified later life.

He highlighted the regulator’s shift in approach to support the DB Funding Code which it previously confirmed that it expected 80 per cent of schemes to be able to meet its Fast Track approach.

Lyne said this approach would result in less contact from TPR and lower regulatory burden on schemes through simpler reporting.

In addition to this, he also reiterated TPR’s intention over the coming year to conduct a broad review of its scheme return and supervisory returns, to rationalise and remove asks which aren’t directly related to good saver outcome.

He also stressed that delivering for savers also meant protecting their pots, which as a regulator, he said means ensuring that the people who run pension schemes can meet the challenge of operating in a more complex, sophisticated environment.

“Smaller schemes will consolidate into larger, more sophisticated trusts and funds – indeed in 10 years, we expect the master trust market to contain schemes managing over £50bn in assets, some of which will exceed £100bn,” he said.

Given this, he said TPR has transformed its supervision of master trusts and DC schemes, pointing to its four-segmented approach as well as its 14-week pilot with three large master trusts.

Additionally, Lyne explained that the regulator wants to see trusteeship align with other professions and corporate governance standards.

He reconfirmed that TPR will launch a strategy through its compliance and oversight approach, which outlines the five key traits of successful trusteeship.

“Whilst we know that there will continue to be smaller schemes, we would ask those trustees to consider whether they can really offer the best value for money for savers,” he stated. “If not, we would encourage them to consolidate.”

He said that value for money lies at the “heart of everything” and the framework will require schemes to provide comparable, standardised data.

Lyne said that although value for money “is just one small part of the overall pensions bill”, he thinks it “really underlines the significant changes that the pensions industry is going to have to work with as we determine the best for savers”.

However, he said that as the framework will likely not be in force until 2028, later this year, TPR will work with the Financial Conduct Authority (FCA) to launch a joint market-wide voluntary survey – asking for detailed asset allocation information from major DC schemes.

Lyne also noted the regulator’s recent launch of its innovation support service and its hackathon earlier this month.

“But innovation doesn’t happen in a vacuum. It starts with strong foundations, and that means improving data quality. This is a top regulatory priority,” he said.

“Indeed, many of the good outcomes we all want for savers will depend on clear, clean, well-managed data for all types of schemes.

“We are living through a data revolution; a time when data is reshaping industries, economies, and societies. And pensions must not be left behind.”

He added that the regulator wants to work with trustees and the industry to drive the development and adoption of open data standards through the implementation of its digital and data strategies.

“As part of this work, we will form industry working groups and help market participants to learn from one another and spur on better practices,” he said

“We say this having seen the benefits of our own investment in digital and data capabilities.

“TPR has used AI over the past 12 months to support its regulatory functions and decision-making to better protect savers.”

He said this has included detecting pension scams, monitoring market trends, predicting pension scheme health, and managing website feedback.

“We know how much more effective this is making us and want the schemes and savers to benefit too,” he said.

Lyne stated that the regulator is no longer just regulating pensions; instead it is in the process of “reshaping the future of retirement in the UK”.

“We are building a system that is data-driven, innovation-friendly, and growth-oriented. A system that works for employers, trustees, and most importantly, for savers,” he said.

“So, whether you’re a scheme provider, a fintech entrepreneur, a trustee, or a policymaker, let’s work together to build a pensions system that’s not just fit for the future, but one that leads it.”

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