09 June 2006
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."
