Regulator sets out how it will supervise CDC schemes

On November 13, 2024, the Regulator issued its compliance and enforcement policy for collective defined contribution schemes, which sets out its regulatory approach and how it expects to supervise these schemes.

The Regulator expects to engage with trustees, employers and other relevant persons such as the scheme administrator, service providers and advisors as part of its supervision process.

In undertaking this shift, Ms Delfas said the Regulator will focus on three priorities:

• Investment. The Regulator will step up its focus on investment governance in both DC and DB schemes.
• Data quality. The Regulator will work to improve standards of data quality, particularly in the run-up to the launch of pensions dashboards. As part of this work, the Regulator is inviting ten to 15 of the largest scheme administrators to voluntarily collaborate with it to improve the Regulator's understanding of how they operate and mitigate systemic risks.
• Trustees. The Regulator will establish formal relationships with all ten professional trustee firms that now govern over £1 trillion of assets under management. The Regulator intends to understand good practice and identify risks, including in relation to ownership structure, skills and experience, and conflicts of interest.

While the frequency and detail of supervision may vary according to the scheme’s level of risk, the Regulator expects to contact scheme trustees annually with a review summary. The Regulator also expects that its supervisory approach will be reviewed and revised over time as its experience with CDC schemes develops.