On the go: The Pensions Regulator has introduced a new supervision regime, which includes one-to-one supervision of the 25 largest schemes in the UK and will aim to monitor all schemes more closely.
As part of its new approach published on Monday, the watchdog will be working more proactively with schemes. A variety of new interventions are designed to address risks more quickly, clearly set out its expectations and take action where necessary.
The changes are part of its pledge to be clearer, quicker and tougher. It comes following a major review of its regulatory approach, which the regulator published in July last year.
One-to-one supervision will be introduced for 25 of the biggest defined contribution, defined benefit and public service pension schemes from next month, with this approach being rolled out to more than 60 schemes over the next year. The pensions watchdog will maintain ongoing contact with these schemes, and in some cases their sponsors.
Recent researchby the regulator found that there was a significant increase from last year’s survey in the percentage of trustees reporting they take no actions to ensure their scheme is treated fairly among competing demands on the employer.
In addition to one-to-one supervision, higher-volume supervisory approaches will also be introduced from next month to address risks in a broader group of schemes.
This second type of intervention will be piloted with around 50 DB schemes to assess compliance with messages in the regulator’s 2018 annual funding statement, specifically concerning whether schemes are being treated fairly when it comes to dividend payments to shareholders.
Chief executive Lesley Titcomb said: “Schemes across all sectors, whatever their size, can expect the volume and frequency of their interactions with us to increase, so that potential risks to pension savers are identified early and put right before it becomes necessary for us to use the full force of our enforcement powers.”
She said the new model is flexible, with the watchdog taking a systematic approach to set its expectations. It “will respond swiftly to emerging risks, taking tough action where necessary to tackle bad behaviour, including by corporate entities”, Titcomb noted.
A broader range of communication channels will be used to make schemes aware of what they need to do in order to comply with the law, she said.
