Nausicaa Delfas, TPR CEO
I am pleased that TPR is changing its stance. The principles it has laid down are risk based but overly so . Trustees have complained that they live under a regime where they can be considered wreck less by TPR, rendering them subject to criminal proceedings from which prison can follow. This is a positive statement,
I am pleased to see two other pieces of good work from TPR last week. The first I have written about, the transfer of Stagecoach to Aberdeen as sponsor of Stagecoach’s 22,000 DB pension members. The second is the ensuring of pension benefits of Northern Foods Pension Scheme’s 13,000 members. The are better protected as a result of TPR’s enforcement.
It is clear that a new TPR is emerging from the distressing position it took towards Trustee’s looking to grow funds alongside the firmness it has shown with Northern Foods.
An encouragement of investment along with an unflinching insistence on recovering from deficits (where this can be done) shows a Pensions Regulator we could be proud of.
Here is the Regulator’s statement which I hope represents a new kind of regulation to match the new legislation which is happily passed through the Commons last week
TPR probes barriers to investment in private markets and infrastructure that could deliver better returns for savers
The Pensions Regulator (TPR) has launched an initiative to explore the approach of defined contribution (DC) and defined benefit (DB) pension schemes to investing in growth assets that could boost returns for savers over the long term, and to better understand the barriers to doing so.
Through the voluntary Mansion House Accord, 17 workplace pension providers have signalled their intent to invest more in private markets by 2030, including in the UK. The announcement in October of the Sterling 20 partnership between 20 of the UK’s largest pension funds and insurers has continued to build on that momentum. TPR published private markets guidance last year to help trustees to improve outcomes for savers by properly considering the full range of options available.
In the current phase of its work, TPR is using its sector insights to understand the range of market opportunities and investment vehicles available to pension schemes, their limitations, barriers and enablers, with an emphasis on UK investment opportunities.
The government’s industrial strategy presents opportunities for pension schemes to invest over the longer term in growth sectors, such as science and technology. By providing insights from across the market, TPR wants to help to create the conditions for schemes to consider investing in a pipeline of assets with long-term benefits for pension savers.
TPR is focusing on DC and DB schemes, with material scale, which may be considering or have the potential to make investments in this area.
TPR plans to complete this engagement by the end of 2025. TPR will share findings with Government and will publish a market oversight report, next year, so that trustees and expert advisers can benefit from the insights that TPR has gained.
Chief Executive Nausicaa Delfas said:
“TPR is uniquely placed to engage directly with DC and DB schemes to better understand their approach to investing in private markets and infrastructure, as well as the current challenges and barriers they face. We hope our research will provide insight to help trustees consider investment in diverse assets to achieve better returns for savers.”
Through TPR’s ongoing engagement with master trusts and other DC schemes, we see indications that the market is already responding to the Mansion House commitments with trustees considering more diversified investment strategies.
Executive Director of Market Oversight Julian Lyne added:
“In the coming months, we plan to ramp up our work to encourage high standards of trusteeship and scheme governance. We expect trustees to acquire the skills, capabilities and access to professional advice to consider investing in diversified portfolios.
“Where schemes fall short, we will be asking trustees to consider whether it would be in savers’ interests to consolidate into larger vehicles with greater investment capabilities.”
TPR “section 89” reports are all very well, but we would learn much more if TPR could also publish brief update reports, to let us know whether or not additional contributions are being paid, whether secured benefits are being maintained and/or increased.
In this most recent case of Northern Foods we shouldn’t have to wait till 2034 to hear whether or not the additional £300m has been paid.
In recent blogs in order to learn what really happened next with telent (GEC-Marconi) and Trafalgar House (Kvaerner) you had to reach out to those on the inside to hear from them what are very encouraging updates. There’s nothing on TPR’s web pages about these.
Perhaps TPR could consider doing this in future annual reports to Parliament?
http://www.thepensionsregulator.gov.uk/media/p2ghb1r2/annual-report-and-accounts-2024-2025.pdf
I think these are technically “section 11(5)” reports.