David Norgrove Looks To Future Of Pensions Regulator
David Norgrove, the chairman of the Pensions Regulator, has set out the future priorities for the regulator.
Speaking at the NAPF Annual Conference 2006, David Norgrove described some of the issues that the regulator expects to face in the future. He outlined how the regulator will use two separate triggers to monitor the progress of scheme funding: the level to which the technical provisions are set and the length of the recovery plan.
He said: "The triggers are not targets but will point out those schemes whose funding plans could merit a closer look. We will be flexible in our approach, recognising that schemes with strong employers pose less risk and that in most cases the best protection for members' benefits is an ongoing employer."
The regulator will continue with its risk based approach but will refine the process, focusing interventions more intensively on those schemes with more than 1,000 members, Norgrove added. "This reflects the fact that 85 per cent of members are contained within just two per cent of schemes and is aligned with a realistic assessment of our capacity. However, regulating schemes at different levels of intensity will not mean overlooking issues which relate to smaller schemes."
The regulator will also focus on defined contribution schemes where there is a more varied range of risks. Norgrove said: "Good administration to ensure the timeliness and accuracy of payments and allocation of contributions is essential if schemes are to attribute the correct fund value to individual members. If there are administrative errors these can be very costly and time-consuming to rectify." Norgrove confirmed that the regulator's early focus will be on identifying and prioritising the key risks and helping the pensions community to understand the issues.
Finally, improving the standards of governance will be a priority. Norgrove concluded:" With the introduction of the toolkit, most trustees of small to medium sized schemes now have access to free online training. During the next three years the main thrust of our work will be on helping the regulated community understand what is expected of them."