The Pensions Regulator (TPR) has set out a plan on how it will help employers prepare for automatic enrolment, improve standards in the defined contribution (DC) market, and address funding challenges within different segments of the defined benefit (DB) landscape.
Its Corporate and Business Plan 2011-14 details TPR’s continued focus on educating and enabling employers and the pensions sector, and addressing risks to retirement savings and the Pension Protection Fund (PPF).
Over the period covered by this plan, TPR’s actions will include:
- Ensuring employers, intermediaries and advisers have the information needed to understand their new pension duties by publishing a series of guides, as well as simple, web-based tools suitable for smaller employers unfamiliar with pension provision.
- Publishing details of its automatic enrolment strategy which will set out how it aims to maximise compliance with the new employer duties, minimising the administration burden on employers while ensuring that they understand that they need to comply.
- Continuing to raise governance standards, working with administrators, auditors and other service providers to improve standards in record-keeping and wind-ups.
- Building on its recent DC discussion paper to ensure that DC schemes are designed to deliver good outcomes for savers.
- Revisiting its strategy on DB funding, including assessing how it will treat the increasing number of closed DB schemes that are maturing rapidly.
- Considering whether different DB segments may require more tailored approaches, standards or guidance.
- Using its resources as efficiently and effectively as possible through closer working with other organisations and regulators.
- Continuing to react effectively to market developments, ensuring it directs its resources in the areas of greatest risk to members, educating and enabling the industry to respond to changes and improve, and reducing the risk of calls on the PPF.
Michael O’Higgins, chair of TPR, said: “Automatic enrolment and the expansion of DC pensions mean it is more important than ever that pension products are designed and run with the best interests of members at their heart.
“We will be working closely with the industry to support good outcomes for new and existing savers. Against a backdrop of budgetary constraints, we will continue to target our resources at the areas of greatest risk to members and the PPF, and to regulate in a transparent and proportionate manner.”
Bill Galvin, chief executive of TPR, added: “Helping employers to comply with the forthcoming automatic enrolment duties is a top priority.
“In the next few months we will be publishing education material, including simple, web-based tools, to help employers of different sizes, intermediaries and advisers, prepare for changes in pensions law.
“Work also continues apace on designing a robust operational framework to maximise compliance with the new duties. Though the majority of employers will choose to automatically enrol their employees into a DC scheme, DB schemes will remain a major part of the picture, and will be paying out benefits for many decades to come.
“We will be reviewing our approach to DB regulation to address the challenges within different parts of the landscape going forward.”
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