The regulator’s strategy, Delivering successful automatic enrolment: The Pensions Regulator’s approach to the regulation of employers and schemes, sets out how the regulator will support the Government’s pension reforms by aiming to ensure that as many employers as possible comply, and encouraging those providing workplace pension schemes to provide safe, durable and value for money vehicles.
Delivering successful automatic enrolment highlights that the regulator intends to maximise employer compliance with the new automatic enrolment duties by providing employers, intermediaries and advisers, with the information, tools and support they need to get to grips with the new duties; establishing a pro-compliance culture so that employers understand that the law is being applied fairly, that employers around them are complying, and that wilful or persistent non-compliance will result in a fine; and ensuring effective systems are in place for detecting and tackling non-compliance.
The document also explains how the regulator will work with the pensions sector with the aim that members are automatically enrolled into pension products that are well-governed, durable and offer value for money by encouraging the market to deliver schemes that encompass the regulator's six principles for good design and governance of DC schemes; and taking a segmented approach to regulating the DC landscape, recognising that some segments are more likely than others to deliver good outcomes.
The Pensions Regulator's chief executive Bill Galvin said: "The Pensions Regulator is committed to increasing both confidence and participation in workplace pensions. Up to 8 million people will eventually be newly saving or saving more under automatic enrolment.
"Our approach will be to provide high-quality information and support so that employers know what they need to do to fulfil their new duties, and take action at the right time.
"The vast majority of members will be automatically enrolled into DC schemes. We will take a targeted approach to risks within the different segments of the DC landscape - and work with the pensions sector to encourage the design and delivery of products that place the interests of members at their heart."
Richard Wilson, NAPF senior policy adviser, said: "We are pleased to see that the Regulator is focusing on other crucial players in the auto-enrolment reforms, such as payroll providers and pension administrators. Auto-enrolment cannot work without HR and payroll staff playing a leading role, but awareness and understanding of the reforms in these groups is not high enough.
"The Regulator needs to take a pragmatic and proportionate approach to enforcement. The vast majority of employers and schemes want to comply, but the new rules are so complicated that many will struggle with the detail. It should direct its resources at the small number of employers who are unwilling to play ball, and the instances where employees are genuinely losing out."
"The Regulator is right to be segmenting the pensions market and considering which types of schemes need the most monitoring and attention. However, its thinking on trust-based schemes is clearly far more advanced than on contract-based schemes, which is strange given how dominant contract-based DC now is. The Regulator and the FSA need to focus on where the risks of poor member outcomes are across all types of pensions."
