The Pensions Regulator (TPR) missed a third of the targets under its key performance indicators (KPIs) with Covid-19 causing a halt to some of its work.
In its annual reports and accounts, published yesterday (16 July), the watchdog said six of its 18 targets had failed to achieve a ‘green' rating. Of these, five received an ‘amber' rating, where a target was close to being achieved or was within a margin of error, while one received a ‘red' rating, where the target was significantly missed.
The filing, which relates to the financial year ending on 31 March 2020, noted that Covid-19 had been a mitigating factor in at least three of the missed KPIs.
While the regulator had succeeded in authorising all eligible master trusts within the statutory timescales, it had narrowly missed its target to extend supervision to 128 schemes, ending at 123 as it "reassessed the profile of those we intend to focus on in the forthcoming year".
It also missed a target on implementing five new regulatory initiatives, again narrowly, with four being launched on record-keeping, recovery plan lengths, the balance of deficit recovery contributions (DRCs), and investment governance. A further regulatory initiative on prompt financial transactions had to be put on hold due to the onset of Covid-19 but is expected to be launched "at the appropriate time in 2020/21".
Of those initiatives it had launched, the regulator saw some key success, not least in an extra £11.4bn of DRCs being secured and average recovery plan lengths falling from 7.5 years to 7.1 years.
Nevertheless, the watchdog also missed targets on establishing its website content strategy and framework for all publications, and commencing the design and implementation of new systems to support its regulatory functions. The watchdog said the pandemic had caused it to delay some of the necessary work.
It also missed a target on developing and designing its approach to deliver the required data standards for pension dashboards as it awaits the outcomes of the Money and Pensions Service (Maps) industry working group.
Still, TPR named several further "chief successes" over the year, including ensuring 98% of eligible jobholders were auto-enrolled, 38 master trusts had been authorised, and direct supervisory contact had been extended to schemes representing two-thirds of UK memberships.
Chairman Mark Boyle said: "Our annual report demonstrates how our clear, quick, tough approach left us in an excellent position to adjust to the Covid-19 pandemic at the end of the financial year.
"Our organisational structure and culture provided a solid base for our Covid response. We have continued to support those we regulate to manage risks and protect pension scheme benefits in an effective, confident, and organised way.
"Undoubtedly we will continue to be affected by external challenges - but I'm confident we will be able to maintain our focus on our statutory duties and ensure workplace pensions continue to work."
Nearly 50,000 fines were issued during the year for non-compliance with auto-enrolment (AE) legislation, and 33.2% of schemes had been subject to a risk-targeted regulatory intervention.
Use of its powers had resulted in some significant penal action, with a record-long five-year jail sentence secured in the case of former charity chairman Patrick McLarry who had defrauded his scheme of £350,000. Meanwhile, in a separate case, a £350,000 fine was issued over a failure to full comply with AE duties.
Chief executive Charles Counsell said: This year we've been able to ensure more people save into workplace pensions, that more is being contributed into workplace pensions and that there has been a reduction in recovery plan lengths across defined benefit schemes and there is better protection for the 16 million savers through our master trust authorisation process."
Every saver "deserves to be in a well-run and well-governed pension scheme", he added, and 1,200 schemes had been engaged over the year, covering issues such as scheme funding and record-keeping.
He added: "Post Covid-19, we will be focusing resources on supporting those schemes that need our ongoing attention, including those affected by the pandemic. I'm confident we will be able to further drive up standards as we look to return to our full supervisory evaluation cycle later this year."
The regulator reported net expenditure for the year at £93.1m, up 9% on the £85.4m in the previous year. There were around £5.8m of additional staff costs, which totalled £55.9m, or 60% of TPR's total costs. Net liabilities amounted to £7m, although this includes some liabilities that are due in future years.
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