We want and need a thriving Pension Regulator.

Toby Nangle is arguing in today’s FT that,

 by in effect briefing against the Pension Regulator’s direction of travel, the government risks making it a lame duck. The longer this continues, the more the regulator’s credibility will be diminished.

It is an extraordinary statement but one based on the very apparent differences between the Mansion House reforms and the Pension Regulator’s DB Funding Code. While the Funding Code aims to get schemes ready for buy-out or make them immune from market risk, the Mansion House reforms urge pensions to take on more risk and go for growth.

Toby’s asking the Government to make its mind up to back TPR

if the events of last year have taught us anything, it’s the importance of institutional credibility

I agree, we need a thriving Pension Regulator that is aligned to Government and has the respect of all its stakeholders – especially Government

Can the Government have the cake without eating TPR?

I think it can and the key is that TPR has new management who want a “new mindset”.

The old mindset, represented by the Funding Code is founded on the twin objectives of protecting the promise to members and protecting the PPF from bad actors in the corporate space. These objectives have been met and the Pension Regulator is now not so much a lame duck as a fat duck.

With 900 staff and an enlarged budget, the Pension Regulator has been given new powers only two years ago. It is , by any foreign comparison a well- heeled regulator. It should be an agent of Government and not in conflict with it, it has the capacity and resource to take on board change and react to it.

And Government has the right to have a say in the purpose of our pension system, as Toby Nangle says.

Private occupational pensions owe their existence to their privileged place in the tax system, so while schemes exist to serve their members, it is not unreasonable to look to them for wider public benefit.

The Government is the agent not the enemy of the people, what it wants should be aligned to what people want and need and as an arms length Governmental body, the Pension Regulator objectives should be in alignment with Government and the people.

The Pension Regulator has the resource to change and the reason to change. So will it change?

Too big to change?

I have heard it said , by those close to the Pensions Regulator, that CEO Nausicaa Delfas has bitten off more than she can chew. That the Pension Regulator’s not for turning – it is too big to change.

Nausicaa Delfas

But the big projects that TPR is engaged in, VFM, CDC, Superfunds , DB and DC consolidation and the review of at retirement choice architecture for workplace pensions, does not need TPR to turn, it needs it to be open to new ideas.

While I agree with Toby that the DB funding code is at odds with the direction of the Mansion House Reform, it can be adapted to accord with the new mindset. The choices open to weaker DB schemes are currently limited to the Fast Track, where sponsors are required to meet Trustee demands for funding against low-risk investment objectives.

A simpler alternative might be to innovate and allow Trustees to find commercial partners prepared to risk share so that a DB scheme can – over time – pay pensions out of improved funding. This may sound like consolidation through superfunds, but it could also be achieved through capital backed journeys, where the market is prepared to provide a contingent asset to allow schemes the freedom to take on risk.

I hope that when she speaks in a couple of weeks to the PLSA conference, she will speak with the same vivacity and clarity as we have heard from her thus far. I hope she will express a willingness to use current powers to enable the Mansion House reforms to happen.

The market will find a way.

A strong stock of occupational pension schemes is essential to the implementation of the Mansion House Reforms. Not only are these schemes capable of taking on productive assets , but they continue to use gilts as their primary means to match liabilities. Insurers do not invest in gilts and do not invest in productive capital of the type the Chancellor wants and needs.

While superfunds are the logical conclusion to the consolidation challenge, they may not be acceptable to other factions within Government – notably the Bank of England and its regulator. So we may see the market repurposing DB master trusts and achieving similar outcomes – albeit not so elegantly.

There is no shortage of capital prepared to stand behind the revival of ambition among DB schemes to pay pensions and not to pay an insurance premium to buy-out.

The alternative  for the Pensions Regulator to being a lame duck, is to be part of a new vision that has DB and DC schemes working to a common purpose – to pay an income for life that gives people dignity in retirement.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to We want and need a thriving Pension Regulator.

  1. jnamdoc says:

    Its not the people, its the remit. And that drives the mindset.
    An over-riding remit to protect the PPF (NOT to improve pensions), led TPR to :
    – close DB accrual – fact
    – over funds schemes, aligning them with and for insurer funding – fact
    – stripped the nation’s private sector DB schemes of growth assets – fact
    – diminish the Trustee model -fact.
    – loss £600bn in asset values, a record across developed world DB Schemes.

    In reading some of the LDI a year on blogs over the weekend (thank you), I’m reminded how aggressively TPR briefed against those who questioned the widescale roll-out of LDI (maligned “as one or two naesayers, dinasours”), and how when challenged event in the W&PC point blankly denied the loss of £500bn of value (“no, its only a timing thing”). Their attitude and response to protect the Institution was awful, what you’d expect in tinpot communist state.

    They were unchallenged and in their minds unchallengeable, suffering from the most obvious case of group-think imaginable, and with no Ministerial oversight. And they have trashed a once thriving DB pension system and the economy to boot.

    The remit needs re-written – surely an overwhelming focus to increase retirement incomes within (acknowledging that can only happen in) a strong economy.

    You must also question bringing in a leader from a legal and enforcement background? Will TPR truly change as it must, or just continue the legislative power grab to further squash dissent Might this just be more group-think doubling down on the past mistakes….

  2. Allan Martin says:

    I have some sympathy for TPR. It doesn’t for example have any remit over the funding of its own staff pensions. That is very strictly reserved for H M Treasury. TPR is not alone in such restrictions, The National Audit Office June 2023 report Managing Government Borrowing* did not cover £2.1tn of index linked debt for unfunded public sector pensions, HMT restricted their remit.

    I similarly expect that TPR wasn’t invited to comment on or consider the impact of QE, or the lack of QT.

    * https://www.nao.org.uk/wp-content/uploads/2023/07/managing-government-borrowing.pdf

    • jnamdoc says:

      You’re too kind Alan. The brainpower at TPR has been considerable, and I too used to wonder if they just couldn’t see the bigger picture, but having now spoke with insiders about this, they acknowledge they did, but in true civil servant speak say ‘that wasn’t our job’.
      TPR’s remit needs to be build pensions, and that can only be done by building an economy, not in isolation from it.

  3. conkeating says:

    The necessary action to confirm a change of mindset would be abandonment of the proposed new DB funding code.

  4. sglover01 says:

    We’ll be confronting these very issues head-on at the next two SGPE Masterclasses, both Online in Zoom:
    The Evolving DB Endgame on Thursday 5th October, at which indeed you are speaking Henry, and for which Fiona Frobisher, who leads on DB policy at the DWP, will give the keynote.
    Here is the Agenda: https://sgpensionsenterprise.sharepoint.com/:b:/s/SGPensionEnterprise/EX4AL07roa1Ktjba-yCnKxcBm5_nSimfCQVuL1TuWEjb7w?e=XaHk9i
    You may register here:
    Investing in Productive Finance on Thursday 2nd November, where the keynote will be given by Louise Davey, Interim Director of Regulatory Policy at TPR.
    Here is the preliminary Agenda:
    You may register here:

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