The Pensions Regulator (TPR) has urged trustees to take practical steps to prepare for the Pension Schemes Bill, confirming that it will look to bridge the gap between the introduction of new duties in the bill and the ‘here and now’ need to govern schemes well.

Speaking at an industry event, TPR interim director of policy and public affairs, Patrick Coyne, emphasised that there are steps that pension trustees should be taking across each of the four themes covered in the Pension Schemes Bill.

"The Pension Schemes Bill is historic in the context of our pensions system," he stated at the Professional Pensions Defined Contribution Conference.

"And the government’s roadmap plans out changes that will take place over the next three to five years... But exactly how we get there is still to be worked through.

"You can already take steps now to iterate and improve your provision and we’d welcome your ideas and insights as you refine your strategic approaches."

In particular, Coyne encouraged trustees to consider their investment strategy and challenge advisors to provide suitable insights and commentary on performance.

"It is critically important that schemes are always using available data and insights to review their investment strategy," he stated.

"And that trustees are challenging their advisers now to make sure that they are providing suitable data and commentary to understand if the long-term objectives for members are being delivered."

Coyne noted that TPR has already revamped its supervisory approach to DC schemes and stepped up its focus on investment governance, suggesting that, further in the future, the value for money framework will also help provide consistent, comparable data in the marketplace to help schemes refine and revise their investment strategy.

"But it likely won’t be in force until 2028," he admitted.

Given this, Coyne confirmed that TPR will work with the Financial Conduct Authority (FCA) "later this year" to launch a joint market-wide voluntary survey, asking for detailed asset allocation information from major DC schemes.

"Running as an annual exercise, we hope to play a version of this data back to the market to allow trustees to gain better insights on any connection between value and asset allocation and make more informed investment decisions for their kinds of savers," he stated.

In addition to this, Coyne encouraged trustees to consider value proposition and work through the practical steps they might need to take to consolidate if needed in the interests of savers. If they have scale consider new investment opportunities, like Long-Term asset Funds (LTAFs), now available.

He also emphasised the need for trustees to explore potential investment in digital infrastructure to ensure high data quality and administration standards in the run up to pensions dashboards, and engage with administrators to understand what they can offer with different price points.

"I’d urge you to use dashboards as a catalyst for broader change," he continued.

"I don’t just mean that you should audit member data for accuracy and completeness – although this is of course fundamental to the success of dashboards and the areas where we have, so far, challenged around 800 schemes in our ongoing regulatory initiative.

"But also, I’d urge to you to consider investing in digital infrastructure to support automation and reporting, and engage with your administrators to understand just what services they can provide given suitable investment."

He also encouraged trustees to start discussions at trustee boards around decumulation products and services and come to TPR's innovation support services for discussions on early ideas.

"Whilst we won’t be able to provide specific advice, approve or endorse the idea, we will be able to confidentially discuss your proposition and highlight any concerns that we may have from a regulatory perspective, if any," he stated.

"But whether you come to us with new product ideas or not, we’d welcome seeing more schemes explore what is possible in supporting savers to make the right retirement decisions for them."

"The Pension Schemes Bill will fundamentally reshape the DC market," Coyne added.

"There are a number of steps that schemes can take now to get ready. So I urge trustees to look now at how they are outcome-focused, building scale, are data-led and supporting savers into retirement.

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