The Pensions Regulator (TPR) plans to take a supportive approach for the first wave of schemes trying to comply with Task Force on Climate-related Financial Disclosures' (TCFD) requirements.

Speaking at the Society of Pension Professionals Conference Month, TPR executive director of regulatory policy, analysis and advice, David Fairs, stated that the regulator was unlikely to take enforcement action during in the first wave of each scheme cohort.

“For the first wave, we recognise that information flows are not perfect, this is very new for us as a regulator as this is very new for the regulatory community,” he explained.

“So, in the first wave, we are taking an approach where we will communicate very clearly, we will try and educate and support schemes in terms of compliance.

“In this first wave, we are much more likely to say: ‘that was a good try, but you could do better in these particular areas’.

“The expectation is that, unless somebody doesn’t do anything at all or doesn’t make a reasonable stab at compliance, we are unlikely to take enforcement action in terms of the first wave. We will highlight where people need to improve to avoid a fine going forward, but in the first wave we are likely to be supportive and not take enforcement action.

“We are thinking of doing something similar for schemes that are required to comply from 1 October next year as well.”

However, Fairs warned that if schemes did not show improvement in the areas that TPR identifies, then the regulator would take enforcement action.

When asked about the regulator’s guidance on TCFD, Fairs said TPR was not expecting it to change significantly.

“We recognise that it would be helpful for us to develop our Trustee Toolkit and other information that provides support and guidance to trustees, but we are having to prioritise our activity constantly and it may be that that is a little bit further down the track than we’d ideally like,” he added.

Fairs was also questioned about the potential introduction of an authorisation regime for defined benefit pension superfunds.

He noted that the regulator was supportive of the introduction of an authorisation regime, noting the benefits of consolidation and economies of scale that superfunds can provide.

However, he stated that they also present different risks, and TPR believed it was appropriate there was an authorisation regime and powers for it to deal with them on an ongoing basis.

“With that, we are in discussions with colleagues at the PRA, the Treasury and the DWP about what that authorisation regime might look like, and discussions are ongoing,” Fairs continued.

“I think all parties think it would be a good idea to have that authorisation regime in place and for that to be brought forward as soon as time allows in parliament.”

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