The Pensions Regulator: its role and responsibilities

25 Sep 2018 By

Independent pensions journalist Emily Perryman explains.

The Pensions Regulator (TPR) is a public body, set up by the government, whose primary goal is to protect workplace pensions in the UK. It has wide-reaching powers to ensure employers and pension trustees are acting in the best interests of savers.

What does TPR do?

TPR aims to ensure people can save safely for their retirement by:

  • making sure employers put their employees into a pension scheme and pay money into it – a process called automatic enrolment
  • protecting people’s savings in workplace pensions
  • trying to improve the way workplace pension schemes are run, and reducing the risk of schemes becoming insolvent

TPR’s remit extends across defined benefit (DB), defined contribution (DC) and public service schemes. It also authorises and supervises master trusts – a type of pension scheme consisting of multiple employers.

TPR works with the Financial Conduct Authority (which regulates personal pension schemes), the Department for Work and Pensions, the Pension Protection Fund and the Pensions Advisory Service.

It has 11 board members who meet around eight times a year to make sure TPR is being properly run and complying with its legal responsibilities.

What powers does TPR have?

TPR has a range of powers to help it carry out its duties. These include gathering information so it can identify risks, taking enforcement action, and demanding that employers provide financial support to a scheme.

For the vast majority of schemes who want to do the right thing, TPR will work with the scheme to ensure it meets its expectations.

If schemes ignore or avoid their responsibilities, however, TPR can take more severe action. This could include banning trustees who aren’t acting in a fit and proper way, issuing fines and even prosecuting offences in the criminal courts.

Some examples of regulatory action TPR has taken include requiring a bank to hand over information as part of an investigation into pension fraud; fining a trustee that failed to complete a valuation on its DB pension scheme; and prosecuting a recruitment company, its directors and senior staff after they illegally opted out workers from a workplace pension scheme.

How does TPR work with pension schemes?

In September 2018, TPR published a report outlining a new operating model that will see it interacting with schemes on a more regular basis.

Schemes deemed ‘high risk’ will be subject to regular one-to-one supervision or assigned a nominated contact in order to work through the issues. ‘Lower risk’ schemes will receive letters and phone calls and be required to attend occasional meetings.

DB schemes are a particular focus of the new operating model. Those who aren’t meeting TPR’s expectations will be required to make specific improvements to the way they manage members’ money.

In some instances, TPR gets involved if there is a significant corporate event which puts a pension scheme at risk, such as a company takeover. Before taking regulatory action it will try to negotiate with the companies to reach an outcome that best protects the scheme’s members.

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All views expressed are those of the author and not Universities UK.