Pensions Regulator chief executive speech on delivering investment returns

On October 25, 2023, the Regulator published a transcript of a recent speech delivered by its chief executive, Nausicaa Delfas, at the Mansion House Pensions Summit, setting out the Regulator’s expectations, largely in relation to investment.

Ms Delfas said the Regulator would like to see "fewer, larger, well-run schemes that facilitate investment in a diverse range of assets". To achieve this, the Regulator expects all schemes to adopt sophisticated investment governance practices. Those lacking the scale or expertise, it says, should consolidate.

The Regulator intends to focus on three areas. 

• Shifting the focus on value for money away from cost alone towards all the components of value. The Regulator is looking to mandating comparable, standardised data disclosures across these components. Annual disclosures on these lines were proposed in the Regulator's joint consultation response published together with the DWP and FCA in July 2023.
• Investment diversification - while the Regulator would not promote investments in one asset class over another, it supports innovation. It will publish new guidance by the end of 2023 on investing in private markets, and in due course it will update its existing investment guidance for DB and DC schemes. In addition, the new DB funding code will clarify that there are "no limitations" on what constitute suitable assets in which to invest, and all schemes can invest in growth assets.

• The Regulator will adopt a "new more assertive approach" and will look to "go beyond basic compliance and seek to influence the market", testing its powers in the interests of protecting savers. In this context, the Regulator intends to "analyse, interpret and act to spot and mitigate risks before they materialise".