The Pensions Regulator consultation on regulating public service pension schemes – an NAPF response
The NAPF has responded to the Pensions Regulator’s consultation on regulating public service pension schemes. The NAPF has welcomed the expanded role for the Pensions Regulator with regards to the governance and administration of public service pension schemes. We strongly believe that proper and more uniform governance will be crucial to the on-going success of the reforms to funded public sector pension provision. It will be important to ensure that structures are in place to protect member interests and to ensure efficient and effective governance.
The new code and draft regulatory strategy strike an appropriate regulatory approach which is consistent with the way TPR regulates private sector schemes, although given its lack of remit around funding it will be interesting to see when it feels that there is sufficient material risk in the governance and administration of schemes as to warrant its stronger interventions.
Overall the code and regulatory strategy are fairly straightforward and there is some useful examples and guidance for scheme managers and pension boards. We also welcome the fact that TPR will be adapting its trustee e-learning toolkit to incorporate public service schemes.
However the requirement to monitor the under and overpayment of contributions could be extremely onerous and impracticable in a CARE scheme with a large number of participating employers. We would urge TPR to be very clear about under what circumstances the fund should be reporting such breaches to ensure that these are proportionate and take full account of the duty in the LGPS on employers to ensure correct contributions are made.