David Walmsley, Director of Supervision at The Pensions Regulator gave this speech at the PASA Annual Conference.
Welcome
Morning everyone and thank you for inviting me to attend your conference today.
I'm David Walmsley, Director of Supervision at The Pensions Regulator covering Trusteeship, Administration and DB regulation.
What if?
That was my initial thought when I received todays invite.
Then when I heard the theme of today's conference, 'Unwritten', I saw the opportunity to start with a blank piece of paper. For some, that's terrifying – for me, it's a world of possibility.
The future is about change and opportunity. Right now, things feel challenging with constant change and ever increasing demands.
We have a joint opportunity, to create a future with a surer, safer, better managed path for savers.
I'd like to share our vision, and importantly, throughout the day, learn about yours.
Before I get going, I'd like to mention colleagues who're joining me today:
- Alison Hatcher, NED who'll be speaking on the panel later
- Paul Neville, ED of DDaT
- Chris Francis who leads our AR engagement
- James Whilie from our AE administrative engagement team
- Lucy Stone who leads our Dashboards programme
You may be wondering why so many of us are here today, that's easy, Administration is important to us and critical to the whole pensions ecosystem.
I started with, what if?
What if the future was one where the market’s dominated by a few, very large, pension schemes, offering good value for money, and all are very well governed.
A time when the pensions industry has harnessed the power of data and technology, and data flows freely, where it should.
Savers are engaged.
Where automation has reduced costs for administrators and AI is a valued tool. No more workarounds. No more resource-intensive tasks. No more annual returns which have been replaced with interconnected scheme returns. All allowing you to focus on saver experience and outcomes.
A time when a saver enters the world of employment, and pensions, to discover their employer has chosen them a pension scheme that deliver top tier services tailored to their needs.
And that when they take stock of their finances, they can use pensions dashboards to see quickly if they are on track for retirement.
When they get relevant and timely communications about their pensions, which are easy to understand. If they have a question, their pension scheme can answer it quickly and effectively as they have all the information they need at their fingertips.
And when they come to retire, there are pathways to support them in making decisions. Meaning that that planning for retirement is no longer something to feel stressed about.
Is this a fantasy? I think it's perfectly achievable.
I've just spent a week hosting my French in-laws who took delight at showcasing their Dashboard, explaining how engaged they are and how well their system works. For years I've endured taunts about football and rugby, now they’re throwing pensions in the mix, this weekend, it just got personal, I can't influence sports, but I can pensions!
I'm not saying there aren't challenges to overcome to get there, but a lot of progress has and is being made by many in this room. We'll hear today from expert panels on how we move this forward, and we'll play our part to help you.
I'll now tell you a bit about what we are doing to make this vision happen.
Our focus on value
The landscape's changing. We're moving towards a market comprised of larger – and fewer – schemes. Schemes using scale to drive innovation; providing new products and services.
At the core of that is a focus on value. We're looking at how schemes are investing to achieve the best outcomes, but also, and critically, working to introduce a value for money framework which looks not just at investment performance and costs, but also the quality of services. Make no mistake, we view administration as a critical service.
Metrics should be published, providing comparability for employers choosing a pension scheme.
We expect schemes to make improvements based on their VFM assessment, raising standards across the market, or for them to consolidate where this is in savers' best interests. You will hear more about the VFM framework later in one of the panel sessions.
But while the VFM framework applies only to DC schemes, all trustees, without exception, should be thinking about value, not just costs.
Administrators should be empowered to deliver real change: trustees must be willing to pay for high quality administration services, and work with administrators as strategic partners. Investment now should save huge amounts in the future.
Moving to how we're working with industry
It's not just trustees who need to change how they work.
In recognition of changes in the pension landscape we're changing our regulatory approach. You will have heard colleagues talk about our move to a more prudential style of regulation. Focussing on outcomes and addressing risks which impact the market and wider financial ecosystem.
We're having open and transparent dialogue with people across the market to hear about challenges and opportunities, and how we can overcome them together.
For now, I would like to focus specifically on some recent developments in our relationship with administrators.
What have we achieved since launching the expansion of our engagement with administrators?
Last Spring we altered our engagement with administrators, in recognition of the critical role you play in savers' experience.
Following a pilot with three large and systemically important administrators, we have been engaging more widely with industry since late 2024.
47 of the largest commercial and non-commercial administrators cover 90% of memberships. We've set ourselves a goal of engaging with 15 administrators over the next year. Organisations ranging in size, structure and type; including in-house and third party.
In addition, we have already met with several very small administrators, to ensure we listen to a full range of views.
As you might expect, we are tailoring our approach to engagement: from light touch 'one and done' calls, to in-depth site visits, with additional follow up.
This process is not one of judgement or assessment. It's about collaboration. To drive improvement.
We value each administrator's insights and contributions. They are often unique, but essential in helping us identify best practice and finding ways of overcoming common challenges.
By working together, we hope to shape a more efficient and resilient sector.
At the end of last year, I posted about the experience in a blog that I hope you may have read.
In terms of administrator challenges and the benefit of participation
We learned a lot.
Administrators have repeatedly told us the current environment is challenging. We acknowledge this and it's our aspiration to make things simpler.
- Growing compliance demands.
- Recruitment and staff retention.
- New technologies to integrate.
These, and more are competing for attention. We appreciate the impact they have, which is why we'd like you think of us as collaborators. As trusted partners, rather than rule makers. We want to work with you more to mitigate the burden and improve outcomes.
Something else we are seeing is best practice.
The pensions landscape is always evolving, and in response, several forward-thinking administrators are already embracing innovation, improving efficiency, transparency and accessibility for savers. I know there is a session later about administration innovation which I am very much looking forward to.
The future involves sustainable, digitally integrated pensions systems that prioritise administrative efficiency. We want to work with you to achieve that.
Looking forward
Overall, industry has been open and receptive to engaging with us. This, however, is just the beginning. It's a journey with a clear destination.
We'll be asking you to share more information, around performance, complaints, business planning, and relationships with other parties in the industry. At the touch of a button, I want to see all industry players connected to a scheme to help identify service quality and interactions between and across key market players so we work with you to address common challenges and better direct our resources to the cause of issues.
Our move towards a more prudential style of regulation and a need to have better oversight of the market and its operation means we need to understand more, and this data will help us.
I would like to thank you in advance, for your continued engagement with us.
Let's turn to dashboards
A topic of keen interest to administrators and a priority for us as Regulator and for the Government.
Depending on the state of your data and your dashboard readiness this year will either be an exciting or unnerving time.
Connection to the dashboard ecosystem is fast approaching – the first 'connect-by' date is only 37 days away. MaPS has announced that three providers have now successfully connected, and user testing is due to begin within months.
I was in parliament just a few weeks ago talking about the progress industry has made – eight in 10 schemes have told us they are on track to meet the timeline set out in DWP’s guidance, which puts us in a good place for user testing.
But I also highlighted the challenges, particularly the criticality of good quality data.
Progress has been made, but one in four schemes still hold some form of dashboard data in a non-digital form.
I’ll just let that sink in.
One in four.
And there's still more to do, especially for DB schemes, to ensure their value data is recent.
We're urging schemes to undertake regular data reviews and improve their data, and this is the driver behind the data quality regulatory initiative that we started a few months ago.
We are reaching out to hundreds of schemes who may be failing our expectations. They must explain to us why they've not taken action to improve their data.
Data will continue to be priority for us – we'll be speaking to you about your matching policies and processes, working with MaPS during user testing, and keeping an eye on the digitisation of data, and the quality of value data, so that dashboards provide a safe and beneficial experience to savers.
Our primary focus is to work with industry to achieve our ambitions collaboratively, however, we stand ready to step in and use our powers where necessary and have set out our approach to compliance and enforcement.
Dashboards is just the beginning, it's a springboard
Which brings me to my final point.
Investments being made in data, and in systems, will have wider benefits and will put industry on the path to being properly digitally and data enabled.
We've set out our ambitions in the DDAT strategy we launched last year, and in our data strategy published a few weeks ago.
We will improve the way we gather and use data – ensuring all data we collect is needed, modernise how we collect data, and where appropriate (within our regulatory framework), find ways to make it easier to access, use, modify and share data.
We want industry to adopt modern data practices and capitalise on the data revolution.
We want to see open data standards being put in place to facilitate the transfer of information between schemes, and with ourselves.
Imagine if you no longer had to fill in scheme returns!
To help us turn this vision into reality we are convening a group of pensions, digital and data experts to help us identify opportunities and actions we can take to improve the pensions' industry's use of digital tools, data and technology in savers' interests.
More widely, we want to support industry as it designs innovative products and services. So, this year we will also launch our innovation hub to encourage industry to support market innovation and facilitate open and transparent conversations on new models and ideas at an early stage.
Conclusion
As the pensions landscape shifts, every part of it has to adapt and adopt to progress.
The future vision exists, we need to work together to get there.
My experience of the administrative sector is that it's open, welcoming and mindful of the challenge of change.
I've left time for some questions, but part of our commitment to a better dialogue is around access to our experts. We have a stand which you can visit and please do speak to any of us during the conference.
Thank you.
