Stakeholder Update Summer 2013 - The Pensions Regulator

Keeping
you informed
Welcome to the summer Stakeholder update. As you
will all now probably be aware, in March I announced my
intention to leave the regulator at the end of June to take
up a new role as group chief executive of the Universities
Superannuation Scheme Ltd (USS).
Leaving the regulator will be very hard. I leave behind a hugely committed
team, which has a clear vision on how to support this vital industry. It has
been a privilege to represent their work to the outside world. I wish them
all very well. We advertised for my replacement in May and the chairman
expects to recruit my successor in July. It has been a pleasure working with
so many of you over the past 5 years.
Update
Stakeholder
Summer 2013
In this issue...
Pension liberation fraud update
What’s happened so far
Maintaining contributions
Draft codes of practice and guidance laid
Making a statement
Our DB funding statement
Latest developments
Updates from across the organisation
Coming soon
New publications on the horizon
Bill Galvin
Chief executive, The Pensions Regulator
For further details of the items mentioned in this
newsletter, please see our website: www.tpr.gov.uk

Latest
developments...
Our
member
information
leaflet
‘We need to
make sure that
the action we
take is joinedup,
as decisive
as possible, and
that we limit the
risks of new forms
of pensions scam
emerging’.
Pension liberation
fraud update
The industry has an important role to play in
disrupting this activity, and there has been
an overwhelmingly positive response to our
‘scorpion’ awareness campaign.
We’ve had more than 4,000 visitors to our website
landing page – with frequent downloads of our action
pack, transfer insert and member information leaflet, as
well as a ‘bite-sized’ e-learning module for trustees
and administrators.
We cannot tackle this issue without the help of others and
we work with a cross-government task force looking at
this issue, called Project Bloom. This involves, amongst
others, the new National Crime Agency, the Serious
Fraud Office, the Serious and Organised Crime Agency,
the Financial Conduct Authority, HM Revenue and
Customs, the City of London Police and the Pensions
Advisory Service.
You will probably be aware of the recent raids undertaken
by the City of London Police, supported by staff from
the regulator and other agencies. If you have any
information about pension liberation fraud, please help
us assemble the intelligence picture by reporting your
suspicions to Action Fraud – the central intelligence hub
for Project Bloom.
The pension liberation
landing page on our website
We are also looking carefully at a range of further
options to tackle this issue, but there is no simple
answer or single quick fix. We need to make sure that
the action we take is joined-up, as decisive as possible,
and that we limit the risks of new forms of pensions
scams emerging. These are issues we will take forward
with our Government and Project Bloom partners, and
with the industry.
Go to: www.tpr.gov.uk/professionals/pensionliberation-fraud-professionals.aspx
to find out more
Stakeholder Update Summer 2013
2

Draft
codes and
guidance
published
‘They build on
current good
practice and
existing legal
duties, as well
as focusing on
establishing clear
accountabilities
for achieving
good outcomes
for members.’
Maintaining
contributions
On 7 June, we published revised codes and
guidance to support automatic enrolment by
helping to ensure that members of workplace
pensions receive the pension contributions
they are due, setting out:
• guidance for employers who have primary
responsibility for ensuring the correct level of
contribution is paid to schemes on time. This explains
how employers can meet their duty to calculate the
correct pension contribution
• codes and supporting guidance for trustees and
pension providers setting out how they should
meet their obligations to monitor the payment of
contributions due to be paid, provide information to
members, and report material payment failures to both
the regulator and scheme members.
They build on current good practice and existing
legal duties, as well as focusing on establishing clear
accountabilities for achieving good outcomes for
members. We also published a quick guide for employers,
providing clear information to employers on paying
contributions, including information on how to calculate,
deduct and pay contributions.
The codes of practice and
supporting guidance address
comments made in response to
the consultation. For example, clarification of the
duty on trustees and managers to monitor
contributions due to the scheme and in particular,
that an effective monitoring system should be
proportionate and risk-based.
The draft codes of practice have been laid before
Parliament and the Northern Ireland Assembly. After
the process is completed, these codes are expected to
come into force in autumn 2013.
To see the consultation response and draft codes
of practice, visit our website: www.tpr.gov.uk/
doc-library/maintaining-contributions.aspx
To see the quick guide for employers, go to:
www.tpr.gov.uk/employers/
contributions-funding-tax.aspx
Stakeholder Update Summer 2013
3

Latest
developments...
‘Our statement
makes it clear that
legislation requires
the discount rate
to calculate future
liabilities (known
as ‘technical
provisions’), to be
chosen prudently’
Annual DB
funding statement
In May we published our annual funding
statement primarily aimed at helping
pension scheme trustees and sponsoring
employers undertaking valuations with
effective dates between 22 September 2012
and 21 September 2013.
Our statement makes it clear that legislation requires
the discount rate to calculate future liabilities (known as
‘technical provisions’), to be chosen prudently, taking into
account the yield held by assets of the scheme and/or
the yield on Government or high-quality bonds. Trustees
can use the flexibility available in setting discount rates to
adopt an approach to best fit their circumstances.
Trustees are also reminded that they should take into
account what is reasonably affordable to the employer
when agreeing contribution levels and should consider
whether the current level of contributions can be
maintained. For some employers it may be reasonable to
make increases while others may find that they are unable
to do so.
To view the annual DB funding statement, visit our website:
www.tpr.gov.uk/doc-library/statements.aspx#s8142
Trustees are also encouraged to produce plans that
take an integrated approach to managing the risks
to their scheme, including funding levels, investment
performance and the employer covenant.
Finally, we also set out that we continue to evolve
our suite of risk indicators as part of our filter
mechanism for assessing recovery plans and that we
would continue with our programme of proactive
engagement with a selection of schemes undergoing
2013 valuations.
Looking forward
• DC code and response
to the consultation
• DC regulatory approach
• DC compliance and
enforcement strategy
• Employer, IFA and accountant guides
to choosing a quality DC scheme
• Updated management committee guidance
Continuing this busy year, we also expect to issue
consultations on revisions to our defined benefit code
and regulatory approach, record-keeping, public service
pensions and trustee knowledge and understanding.
Stakeholder Update Summer 2013 4

Latest
developments...
‘There is a lot
going on, and
we are all working
together to
build confidence
in workplace
pensions’.
Corporate plan 2013-
2016 published
In May, we published our Corporate plan
for 2013-2016, setting out our strategic
approach to regulating defined benefit (DB)
and defined contribution (DC) schemes and
maximising employer compliance with new
automatic enrolment duties.
We held our annual stakeholder conference on the same
day and set out for you our priorities, as well as hearing
from some of you on what challenges there are facing the
industry. The key message for the day was that there is
a lot going on, and we are all working together to build
confidence in workplace pensions.
Thanks to those of you who attended, and also to the
presenters, Tim Thomas from EEF, Craig Berry from TUC
and Roger Mattingly from SPC.
Trustee updates
Trustee toolkit
Updates to ‘Funding your DB scheme’, ‘DB recovery
plans’, ‘Contributions and funding principles’ and
‘How DB schemes work’ have been made to reflect
the challenges that DB trustees face in the current
economic environment. For those trustees who have
already completed these modules and the toolkit,
we recommend they go and have a look and refresh
their knowledge. For those who are in the process
of completing the toolkit, we recommend that they
complete the new versions of the modules.
Guide for new trustees
Aimed at people new to the role of trustee and also
to those who may be considering becoming a trustee,
it sets out roles, responsibilities and our expectations,
and promotes the resources we can provide to help
them gain a deeper understanding of the role. We’ll
be emailing a link to this to chairs of pension schemes,
so that they can pass this on to new trustees or anyone
thinking of becoming a trustee.
Read the Corporate plan
here: www.tpr.gov.uk/about-us/
corporate-plans.aspx
To see the DB modules, visit our Trustee toolkit:
https://trusteetoolkit.thepensionsregulator.gov.uk/
arena/index.cfm
Stakeholder Update Summer 2013 5

Latest
developments...
Automatic enrolment
monthly reports
Beginning in April, we have begun to publish monthly
information on automatic enrolment, derived from
information submitted by employers when they register,
supplemented by annual reports including additional
analysis and commentary. This report shows, on a
cumulative basis, the number of employers who have
registered with the regulator on completion of their
automatic enrolment duties.
By the end of May, over 600 employers had registered
with us. You can read the latest figures here:
www.tpr.gov.uk/doc-library/research-analysis.aspx#s5188
Feedback
We hope you find this update useful. Please do get in
contact if you have any feedback via the stakeholder
team at: stakeholder@thepensionsregulator.gov.uk
Stakeholder Update
© The Pensions Regulator
Summer 2013
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