PMI survey shows members are more dissatisfied with policymakers than last year
The Pensions Regulator’s actions are a major contributory factor. More than four in 10 (44%) of respondents registered their dissatisfaction with TPR, particularly over “significant delays” in introducing pension policy.
These include fallout from the gilt crisis and perceived problems with the DB funding code are all causes for concern. Respondents also claimed that TPR has been “too slow to react” to the liquidity crisis that caused turmoil in LDI strategies and the cost of living crisis.
The proposed DB funding regulations are highlighted by nearly four in 10 (39%) as a concern, with respondents raising issues around the lack of flexibility for open schemes, conditions that will encourage group-think and the increased administrative burden on small schemes.
A spokesperson for the Pensions Regulator said: “We have set out an ambitious agenda to make the pension system the best it can be, and we look forward to working with our partners across the pensions industry to drive innovation and protect savers.
“Where issues arise, we are always keen to listen and learn. The pace of change in pensions shows no sign of slowing, and so we must all adapt.
“We need to do this so that pensions deliver a pot that enables savers to have confidence, empowerment and security in later life.
“We are committed to driving up value for money in the pensions market. We will evolve our regulatory approach accordingly, and we will seek assurance from the industry that this is being delivered.”
It’s not all TPR’s fault
The government is blamed for the LDI crisis and turmoil in the gilt markets by almost half (48%) of the pension industry. However, more than a quarter (27%) lay the blame squarely at the feet of investment consultants, fiduciary managers, and asset managers.
A further 11% blame pension scheme trustees, and 10% blame the Bank of England.
The crisis forced 48% of respondents to act to protect their scheme. This included 15% forced into unplanned asset sales and 13% who reduced hedging ratios.
Respondents were also concerned about the serially delayed pensions dashboards project, following news that implementation was going to be delayed while the programme undertook a reset.
Diversity is great – we just don’t have it, yet
Diversity among trustee boards is widely supported. Though only 28% consider their own scheme to be diverse, there is a belief that diversity would encourage reduced group-think, better succession planning, wider experience, and a more accurate representation of the membership of the scheme.
However, more than half (51%) of respondents said their trustee board did not have an ED&I policy.
Tim Middleton, director of policy and external affairs, at the Pensions Management Institute, said: “The last six months have been incredibly turbulent for the pensions industry. Many professionals have faced substantial challenges in dealing with the fallout of the LDI turmoil and the cost-of-living crisis.
“At the same time, new regulatory hurdles including the DB funding code and uncertainty over the implementation of pensions dashboards have caused disruption.
“Understandably, dealing with these problems as well as the substantial regulatory reforms have left many feeling frustrated at the current direction of pensions policy.”
Update: 1100 Friday 26 May 2023 – this article was updated to include commentary from the Pensions Regulator.
