The Pensions Regulator (TPR) has written to the government to outline the work it is doing to support the push for UK growth, including plans to "significantly" boost business confidence, improve the investment climate, and foster sustainable economic growth.

In particular, TPR committed to increasing the value of pension funds, enabling productive investment, reducing unnecessary regulatory burden and releasing funds for investment, driving growth through data and digital enablement, and supporting market innovation.

The regulator previously pledged to reduce unnecessary regulatory burdens and improve data sharing, as part of the government's broader plans to cut the administrative cost of regulation on business and drive economic growth.

TPR CEO, Nausicaa Delfas, has since provided further details on this work at the JP Morgan Pensions and Savings Symposium, where she outlined the regulator's plans to lead in key areas designed to protect savers, enhance the system and innovate in the interests of savers.

"I believe that all of us in the pensions system – government, regulators and the market – can have a huge positive impact on people’s lives," she stated, highlighting the Pension Schemes Bill as an "important first step" towards making the pensions system work for everyone.

Delfas pointed out that much of the work in key areas is already underway, including recent changes to how TPR supervises master trusts and work to drive better governance standards amongst trustees.

However, Delfas said that this is "only part of the solution", emphasising the need to understand, collectively, what the broader barriers and trade-offs are to unlocking growth in savers' interests.

In particular, Delfas suggested that increasing transparency could help, arguing that "well-designed regulatory policies with transparency at their core can correct market failures, promote equitable growth and enhance economic stability".

"And in the forthcoming Pension Schemes Bill and our value for money framework, we have the potential to do all three," she said.

Delfas also encouraged trustees to avoid focusing only on cost, stressing the need for trustees to "look across the market, see what good looks like, learn from other providers – their competitors – to drive continual improvement, and to make sure that all schemes in the market offer genuine value".

She also suggested that increasing transparency, and a focus on value, may mean the links between asset allocation and performance become clearer, emphasising the need for trustees to have access to high-quality investment opportunities to capitalise on this if so.

"Pensions are uniquely placed to consider long-term returns, and I would urge you all to consider what more you can do, particularly around transparency in performance and associated charging structures," she stated.

Embracing innovation will be critical too, according to Delfas, who pointed out that while TPR has already supported new products and services to come to market, including superfunds, more progress is still needed.

"We want to establish closer, clearer and more proactive lines of engagement with innovators", she said. "Regulation has a role to play, because to be genuinely innovative, market actors need to know what the guard rails are for innovation."

In line with this, she confirmed that TPR will this year develop an innovation framework and criteria to trial new ideas, with plans to then launch a hub to test a variety of innovation services with the market by the autumn.

Delfas suggested that the 'digital and data revolution' provides wider opportunities to reduce regulatory burden, confirming that, to support the new defined benefit (DB) funding regime, TPR has "radically" reduced its data requirements and is bringing in a new semi-automated digital submission form.

"This not only gives us the information we need but saves schemes paperwork and countless people-hours," she stated.

"Over the coming year we plan to go further and conduct a broader review of our scheme return and supervisory returns, to identify rationalisations and remove of unnecessary burdens on schemes."

However, TPR's letter also stressed the need for change from the government to support these changes, warning that there are several instances where legislative duties, particularly those prescribing provision of information or requiring TPR to issue a penalty, have become outdated and now constrain our ability to reduce burden.

"For example, the requirement for TPR to issue a fine whenever a pensions scheme fails to publish its ‘chair’s statement’ on time is no longer required to drive desired behaviours," Delfas explained.

"Creating a delegated rule-making power would enable TPR to most effectively make sure that its interventions delivered value to the saver and growth to the economy and allow us to reduce unnecessary burden.

"At the same time, it would allow us to iteratively adapt to the technological advancements taking place in industry so that savers and the economy are protected and value maximised."

In addition to this, Delfas encouraged ministers to consider establishing a government-led working group on investment and growth bringing together government, regulators and industry stakeholders to look at the issues and levers for investment and growth in the round.

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