In a submission to the Work and Pensions select committee inquiry into DB pensions, The Pensions Regulator encourages broader consideration of a wider role for the PPF. pic.twitter.com/g2ACSuAEPe

— Josephine Cumbo (@JosephineCumbo) June 12, 2023

I’ve written several times recently about a quite different tone coming from the Pensions Regulator. It may have something to do with it being “under new management” , it may be inspired by the Treasury and DWP’s desire for pension funds to be an agent of UK growth, it may be a recognition that LDI showed how bankrupt of vision the DB funding regime had become

But it wasn’t until Jo Cumbo picked up on the Pension Regulator’s submission to parliament’s Work and Pensions Committee, that I realised the Damasclean u-turn that it has taken.

Until very recently, the mantra of PPF is that we “must protect the PPF”. That meant setting up complicated Regulatory Apportionment Agreements so that the likes of BHS and BSPS stayed out of the pension protection fund at great expense to sponsors (and in BSPS’ case to members).

Now the PPF is being promoted as a consolidator, along with pension superfunds. Indeed the PPF is being thought of as a pension superfund whose purpose may be to fund UK growth through seeding start-ups and scaling fintechs to Series A and beyond.

And it looks as if the Pension Protection Fund is up for it

The PPF’s Evan Guppy says it would “make sense” for the lifeboat to be a consolidator for small private sector DB pension schemes that may struggle to get a buyout. This would be a new role for the PPF.

— Josephine Cumbo (@JosephineCumbo) June 8, 2023

The sunny uplands

For nearly twenty years, TPR has  discouraged the idea of regenerating pensions to invest for their and the country’s future. Such is the U-turn that it is now suggesting that the sacred cow should now be exploring the sunny uplands of a bright new economy!

Jo was not quoting out of context, one of my actuarial colleagues emailed me after reading the full submission

this is fascinating, particularly the recognition of the shortcomings in the buyout market, regulatory and governance oversight, and the circumstances of schemes, especially the stat on 72% being £100m or less.  The style of writing seems a lot more open and conciliatory too which if reflected in a change of ethos/culture in Brighton would be most welcome.

There are other references too to new guidance covering alternative covenant schemes in addition to a review of the June 2020 superfunds guidance; we knew about the latter having contributed to the brief consultation but it’s the first time I have seen reference to a broader brush guidance.

There has been a quiet revolution at our Pensions Regulator, I noticed it in my conversations with Nausicaa Delfas and I heard it in her recent speech at Professional Pensions Live.

Let us hope that these early signs of change are followed through, that the accursed DB funding code is ditched or stripped of its “Fast track” restrictions. Let’s hope that consolidation of DB and DC schemes leads to a focus on value not on risk reduction.

All roads do not lead to buy-out and keeping occupational schemes open, whether as DC, DB or CDC represents a vision for the future that was sadly lacking in the first two decades of the century.