For those not able to make the Pension PlayPen coffee morning today, here – in his own words- is the gist of his remarks. You can follow them in bullets on the powerpoint and we will be posting the video in the not too distant.
Most regulators manage about 15 years of operation before they are replaced or revised.
TPR was established in 2005, as a response to the Maxwell scandal and other events, and has expanded from an initial establishment of about 20 people and a budget of £10 to around 1000 people and a budget of around £100M and on a rule-of thumb measure, costing employers around £2B a year in overheads.
It is probably time to examine whether we still need it in its present form, whether it is still needed to protect members’ outcomes, and whether some of its activities are counter-productive.
Other regulators are adopting a ‘compassionate regulation’ regime, attempting to support regulated persons rather than punish them, and complying with government policies on reducing regulation.
The uncompassionate regulator
It is hard at present to measure whether TPR is value-for-money and whether it has been sufficiently professionalized. It shows signs of Pournelle’s Iron Law of Bureaucracy, ie ‘that in any bureaucracy the people devoted to the benefit of the bureaucracy always get in control and those dedicated to the goals that the bureaucracy us supposed to accomplish have diminishing influence or are eliminated entirely’.
It could be repurposed to more effective in proving safe havens to pension funds that need to modernize themselves, and have more effective control of pension scams, which are in reality the main threat to pension scheme members, rather than lay trusteeship.
It also needs to review whether there is regulatory creep, ie adopting policies on ESG, DEI and consolidation which are second order issues, and not appropriate for regulators to be involved with. Finally trade bodies need to use their lobbying skills to participate in discussions with regulators not so much on detail as on purpose and tone.
Well said Robin, and a brave man to go against this enforcing Regulator.
At some point in history it will be realised just how fantastically, almost unbelievable destructive TPR has been both against the provision of pensions for the working person, but more importantly for the lasting damage it wrought upon our economy.
It should have been protecting / guiding schemes against the dangers of single issuer concentration of their investments, but instead it oversaw and directed the near whole scale disinvestment of out of growth and enterprise, and sucking £500bn in contributions from employers unnecessarily. All on the basis of a politically influenced skewed remit to protect the PPF, and using the scare language of “derisking”.
Suffering from an almost soviet level of statist groupthink, even now they will say “we were only doing our job”.
Unfortunately, it will take some brave politicians to disentangle the whole mess.
It’s clear of course that nothing can be done about the Regulator until the other side of an election, as to do so would make the Govt complicit in what has been achieved under the TPR. I don’t think they were – but they run the risk of opening themselves to worse accusations than that – of neglect; of being totally blindsided uninterested in what TPR was inflicting upon our economy.
I could add significantly to Robin’s list of challenges, but in the interests of a good debate can I just suggest reference to TPRs S89 reports? Nortel will have the biggest £bn or $bn success amounts.
Personally I would like to thank TPR for their attendance at a 12.30am trustee – (pre-packing) employer meeting one Sunday morning a few years ago. I’m also grateful for their “reputation challenging” letter to an overseas company about abandoning their UK subsidiary’s DB Pension scheme when manufacturing moved east.
Nortel Pensions website says total recoveries were £1.27 billion, but not all payments to members have been completed yet, some 14 years after the original corporate failure.
I think the original claim was reported as £2.1 billion.
I do wish public bodies and others making claims about “agreed” recoveries or fines levied etc. would then provide a later update about how much was actually collected and how much was written off as being irrecoverable. Not to mention the costs of getting there, and who paid such costs ….
Had you been on yesterday’s webinar, Allan, you might have heard discussion of another of TPR’s “successes”, in connection with auto enrolment enforcement.