"Transformative", "a game-changer", "once in a generation opportunity", "pivotal". This is just some of the language that has been used to describe the potential impact of the Pension Schemes Bill.

The Bill promises to be the most significant moment for pensions since automatic enrolment (AE) began a revolution in saving in 2012. And we look forward to the next stage of the Pensions Review and  what it means for the adequacy of saving. But the central challenge remains: how do we build on the success of AE to ensure that our system really delivers value for money right across the savings journey, and through retirement? The very real risk is that millions of people who have defined contribution (DC) pensions will not have enough to support themselves in later life. And even if they do, without support, they risk losing much of their hard-saved money by taking the wrong decumulation option for them.

Unfinished business

So it is clear that the UK pension system is unfinished business. But the Bill gives us all the chance to change that. Its reforms will help with consolidation and value to deliver greater returns, and the guided retirement duty will help complete the picture with default solutions and services at retirement. It's an important time for us at TPR, and for everyone involved in pensions. It's time for the pensions sector to really raise its game and deliver for savers. And it's why TPR is transforming into a market-facing, prudential-style regulator, delivering meaningful initiatives that protect savers. For many years, we have been building a vision for how pensions can and should secure better retirements. We now have all the pieces of the jigsaw to make that vision a reality.

Innovation

This is not just a revolution in DC. Never before has there been so much choice for defined benefit (DB) schemes. Much has been said already about the Bill's provisions for DB pension schemes to release surplus funds, to support employers' investment plans and benefit scheme members. We see the potential for these funds to be invested into the UK economy, supporting infrastructure, housing, and clean energy projects. But nor are we deaf to industry warnings that inappropriate surplus release could put retirees' savings at risk. That's why we've produced new guidance for trustees and employers, to help industry consider the range of new models and options available, and to highlight the questions trustees should be asking themselves. We expect DB trustees to have plans ready for how they would respond to sponsoring employers' requests to release some of their scheme's surplus and to take advice and undertake an appropriate level of due diligence. As an industry, we are at a pivotal juncture, with the opportunity to utilise data and new technology, and to approach things in a different way to really deliver for savers. That's why we have launched our innovation support service. We want early conversations with industry, to debate great new ideas from the ground up when they are in savers' interests. Working with industry, the service will strive to reduce unnecessary regulatory barriers to pensions innovation.

Quality of Trusteeship

With bold new legislation comes ever greater responsibility for trustees, advisers and administrators. The decisions you take have enormous impact on the financial wellbeing of millions of savers. And as the system grows and evolves, so must the nature of trusteeship. What worked in the past, may not work for the future. To address these challenges, we will launch a new strategy to bring trusteeship into line with other professions and corporate governance standards.

It will say more about the traits that trustees must possess, namely:

  • saver outcome-focused
  • capable of constructively challenging to avoid group think
  • highly skilled and diligent
  • agile and responsive
  • collaborative but accountable
  • data-led

Time to change

TPR is transforming to meet the needs of savers. We are on the right path to ensure the Pension Schemes Bill will be the defining moment it promises to be. But everyone working in the pensions industry needs to be thinking now about their own role in making these reforms a success. The industry needs to adapt, evolve, rethink what it means to be a trustee, an administrator, an advisor. I am confident we will work together to complete the jigsaw and turn a vision of better outcomes for pension savers into a clear reality.