Making regulation better
At the Pensions Regulator, we have always taken a risk-based, Better Regulation approach to discharging our duties – targeting resources on areas that pose the greatest risk to our statutory objectives, and ensuring our actions are proportionate, says Tony Hobman
This approach, which informs our other priorities, is outcome and customer-focused – guided by the Hampton principles and the principles of good regulation: proportionate, accountable, consistent, transparent and targeted.
Last month we published our Corporate Plan setting out core themes to guide our strategy for the coming years: improving governance and administration; reducing risks to DB and DC scheme members; preparing for 2012; and Better Regulation.
Our operational strategy is to Educate and Enable, whether through our Trustee toolkit, our guidance and codes of practice, or our targeted communications, as much as it is to Enforce when action is necessary. We aim to work collaboratively with trustees, employers and others involved in pension schemes to enable them to maintain standards of governance and administration, and play a vital role in helping us to mitigate risks for schemes.
We are also working to minimise burdens from our reporting requirements – always in the long-term interests of scheme members – and particularly important in the current economic climate. We have reduced the amount of data we gather from schemes, launching the online Exchange system for submitting scheme returns and levy payments that enables us to pre-populate scheme return forms from previous returns. We continue to keep this process under review to ensure we only gather data we need.
The Better Regulation Executive and the National Audit Office will shortly review how we have implemented the Hampton vision as part of a programme of reviews of all regulators. This provides a timely opportunity to revisit what Better Regulation means for us and ensure good practice is embedded in our work – as we respond to the challenges of the downturn, the changing pensions landscape, and preparations for 2012.
Recent financial market turmoil has prompted debate about regulation of financial risk and the impact on pensions. We are assessing the impact of the downturn on risks facing schemes and tailoring our approach where appropriate. Our scheme-specific funding regime has sufficient flexibility to cope in the downturn, and we are encouraging open dialogue and assessment of long-term risks to protect pensions while enabling employers to contribute to the recovery. Our efficiency programme means we are prepared for more work with only a modest increase in our budget. In summary we believe risk-based better regulation remains the right approach.
Tony Hobman is the chief executive of the Pensions Regulator
For more information on TKU and the trustee toolkit, visit: www.thepensionsregulator.gov.uk and www.trusteetoolkit.com.
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