The Pensions Regulator (TPR) has called for industry collaboration to tackle the UK’s “unfinished” pension system, as it rolls out new regulatory approaches and support ahead of the delivery of upcoming legislative reforms in the Pension Schemes Bill.

TPR chief executive, Nausicaa Delfas, emphasised the scale of the challenge facing the pensions industry, warning that millions of defined contribution (DC) savers risk not having enough to support themselves in later life.

Speaking at an industry event, she said that there are two central tenets to TPR’s approach to protect, enhance and innovate in savers’ interests, which reflect the work it will be doing this year.

This includes the idea that both defined benefit (DB) and DC systems should be structured to provide value, as well as empowering savers to make informed choices at retirement.

With over 82 per cent of DB schemes now fully funded, Delfas said the focus is shifting from deficit reduction to long-term planning, including securing endgame options like buyout or emerging consolidator models that offer improved governance.

She also confirmed that TPR plans to publish new guidance on endgame options for trustees "soon", aimed at helping them to ask the right questions as they determine the best ways to fulfil their commitments to savers.

Additionally, she said that over the next year, the regulator will embed the principles of the DB funding regime through an evolved and improved approach to DB supervision.

“Learning from our experience with master trust and DC supervision, we will focus our activity where the greatest risk lies and let the well-managed schemes get on with the job of delivering for savers,” she said.

Meanwhile, Delfas emphasised that value is "crucial" for DC and indicated that, in the coming year, TPR will increasingly question schemes that seem to offer poor value.

Additionally, they will work on simplifying the system to promote greater transparency in performance.

Delfas also emphasised the role of the value for money framework in this goal, which she said, “will empower trustees, providing the tools they need: standardised data and metrics that matter, accessible and in the marketplace at the same time”.

In response to the government’s commitment to setting out a pipeline of investment opportunities over the next decade, TPR will, over the coming year, work with the market to help understand the kind of investment opportunities that will be attractive to different schemes.

She said with those insights, the regulator will assist the government in understanding and prioritising growth opportunities that benefit both savers and the economy.

TPR will also support the development of a Small Pots Data Platform to enable consolidation and assess how schemes are currently managing small pots to avoid “needless complexity”.

Delfas also said another priority for TPR was to enable savers to take informed decisions at retirement.

In particular, TPR are focused on “simplifying the system and allowing savers to find and view their pensions all in one place, supporting the development of new products to market which have the potential to benefit savers and working towards a system which guides individuals towards the right retirement choices for them”.

“Pensions are about to become increasingly visible to millions of workers through the advent of dashboards,” she continued.

“Savers need to be able to trust the information they are viewing about their often long-lost and forgotten pensions.

“Data quality is essential for the success of pensions dashboards and with deadlines looming, data should already be on every trustee board’s agenda.”

She acknowledged that dashboards have provided a “much-needed catalyst” for radical improvements in data standards and investment in administration across the industry, but argued that this should not be the end of the digitalisation journey.

Given this, she said TPR will ensure trustees have the right data hygiene in place by continuing its data quality regulatory initiative as well as working towards common data standards through the implementation of its Digital, Data and Technology Strategy and Data strategies.

The regulator will also have a stronger oversight of pension administrators to provide saver value and pension system integrity.

Delfas also reaffirmed TPR’s commitment to a more prudential-style of regulation, taking into account the market as a whole and continuing to be more open and transparent in dialogue with those who run pensions.

“We want schemes, advisers and administrators to engage with us early to prevent problems arising later,” she added.

"The market is changing. The regulator is changing. But the pensions challenge remains. There is no quick fix. But now is the time to work together to make pensions work for everyone.”

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