Reducing regulatory burden and enabling access to a broader range of diverse assets are among the ways The Pensions Regulator (TPR) will help boost economic growth, CEO Nausicaa Delfas said today.
Ms Delfas added that this is not TPR’s task alone to generate growth in savers' interests and the market needs to respond and continue to innovate with new product offers, greater transparency and genuine value for money offerings.
"Economic growth and the interests of savers do not have to be in conflict. Indeed, they could be mutually reinforcing," Ms Delfas told delegates at an industry conference.
Addressing the JP Morgan Pensions and Savings Symposium, she said everyone in the pensions system – government, regulators, and the market – can have a huge positive impact on people's lives.
Ms Delfas' comments come as TPR has published its letter to government outlining measurable commitments to significantly boost business confidence, improve the investment climate, and foster sustainable economic growth, consistent with TPR's remit.
Value drives better outcomes
In the speech entitled pensions regulation and growth, Ms Delfas set out how TPR will lead in key areas designed to protect savers, enhance the system and innovate in the interests of savers.
Key areas for action, she said, are already under way, including changes to how TPR supervises master trusts and driving better governance standards amongst trustees.
Creating better value, including, where appropriate, how schemes can invest in productive finance assets, will continue to be at the centre of TPR's work, in addition to using data more efficiently to reduce regulatory burden.
She said: "Well-designed regulatory policies with transparency at their core can correct market failures, promote equitable growth and enhance economic stability. And in the forthcoming Pension Schemes Bill and our value for money framework, we have the potential to do all three.
"Pensions are uniquely placed to consider long-term returns, and I would urge you all to consider what more you can do, particularly around transparency in performance and associated charging structures."
In its letter to government, TPR pledges to use its unique position in the market to engage with schemes and with government and help to research the profile of potential assets that would best align with different types of schemes' objectives.
Innovation
Embracing innovation will be critical, Ms Delfas added, noting TPR has already supported new products and services to come to market, including superfunds. "But we want to establish closer, clearer and more proactive lines of engagement with innovators", she said. "Regulation has a role to play, because to be genuinely innovative, market actors need to know what the guard rails are for innovation."
She said TPR will this year develop an innovation framework and criteria to trial new ideas. "With this understanding we will then launch a hub to test a variety of innovation services with the market by the autumn."
Reducing burden
Ms Delfas told the conference that the 'digital and data revolution' provides wider opportunities to reduce regulatory burden. To support the new DB funding regime, TPR has radically reduced its data requirements and is bringing in a new semi-automated digital submission form.
She said: "This not only gives us the information we need but saves schemes paperwork and countless people-hours. Over the coming year we plan to go further and conduct a broader review of our scheme return and supervisory returns, to identify rationalisations and remove of unnecessary burdens on schemes."
Notes to editors
- Read TPR's letter to the government, A new approach to ensure regulators and regulations support growth.
- The letter makes several commitments in five key areas:
- increasing the value of pension funds
- enabling productive investment
- reducing unnecessary regulatory burden and releasing funds for investment
- driving growth through data and digital enablement
- supporting market innovation
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are to:
- protect members' benefits
- reduce the risk of calls on the Pension Protection Fund
- promote, and improve understanding of, the good administration of work-based pension schemes
- maximise employer compliance with automatic enrolment duties
- minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only)
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