On the go: The Pensions Regulator’s commitment to engaging proactively with poorly funded defined benefit schemes and their employers has been called into question by two parliamentary select committees, in a stinging letter that discusses the future of chief executive Lesley Titcomb.
Following the culmination of their joint inquiry into the collapse of outsourcer Carillion last week, the Work and Pensions Committee and Business, Energy and Industrial Strategy Committee questioned key performance indicators set in the regulator’s recently issued corporate plan.
Several KPIs remain unchanged for 2018/19 from the previous year. For example, the 70 per cent target for “the proportion of assessed DB scheme risk we have engaged with during the last three years” will not increase under the new corporate plan.
Similarly unchanged goals focused on timely action or closure of cases, proactive engagement ahead of formal valuations, and number of enforcement cases. These were set at already ambitious levels, according to the regulator.
“The [committees’] report acknowledged that TPR has prioritised more proactive regulatory work and has set corporate performance indicators regarding quicker intervention in DB schemes that are underfunded or where avoidance is suspected,” Frank Field and Rachel Reeves, the chairs of the two committees, wrote to the regulator’s chair, Mark Boyle.
“We were disappointed, however, that in your latest corporate plan, released on May 11, the target KPIs for DB regulation appear very modest in scope, they added.
The MPs also asked Boyle for more information on how it would be evaluating the performance of chief executive Lesley Titcomb, whose role is up for renewal in March 2019.
“While there is a desperate need for the regulator to be quicker, bolder and more proactive, this will require substantial cultural change in an organisation where a tentative and apologetic approach is ingrained,” the letter continued. “We are far from convinced that TPR’s current leadership is equipped to effect that change.”
Responding to the letter, Boyle said in a statement: “TPR is a very different organisation from five years ago – we have become clearer, quicker and tougher and we are implementing an ambitious programme of change that is transforming the way we work.”
He pointed to recent successful DB settlements, such as those involving BHS and Coats, the TPR Future programme, and highlighted the regulator’s recent court victory against ITV.
Boyle added: “Tougher powers in the government’s white paper will strengthen our ability to clamp down on company bosses who put pension savings at risk. We look forward to talking to the committee about our work as part of its ongoing inquiry.”
The committees have also written to all the key witnesses in the inquiry, including asking the Financial Reporting Council to examine its leadership culture and asking the Competition and Markets Authority to open an investigation into the ‘big four’ auditing firms.
