We often speak about the three Es – The Pensions Regulator’s “educate, enable and enforce” mantra. As a small, risk-based regulator charged with overseeing an industry that provides pension benefits worth over £1tn, it is vital that we use our resources in the most productive and cost-effective way. Using education to help employers and pension schemes meet their obligations, as well as prevent problems from occurring later, is clearly better than having to resort to the use of our enforcement powers.
The Pensions Regulator’s statutory objectives include protecting the benefits of members in work-based pension schemes, promoting and improving understanding of good pension scheme administration, reducing the risk of the Pensions Protection Fund needing to pay compensation and, from 2012, maximising compliance with employer duties under the Government’s workplace pension reforms.
We use “educate and enable” in pursuit of all these objectives and we have a range of channels for getting our message out. Targeted emails and calls to trustees and pension professionals, bite-sized e-learning tools such as our trustee toolkit and full regulatory guidance, speaking at pension industry events and working with the media are just some of the ingredients of the regulator’s education campaign.
Our most recent education drive focused on the importance of high standards of administration, including maintaining complete and accurate records. It is costly to correct poor records and this can impact on members’ benefits. Getting these details right is important for existing members and new savers under automatic enrolment. 2011 is going to be a big year in terms of raising awareness among employers of their duties under the Government’s pension reform programme and our communications will begin in May.
Our newest statutory objective, to maximise compliance with the new employer pension duties, brings many new challenges, not least in terms of education and we are gearing up for this. Every single employer in the country will need to do something about workplace pension reform and it is paramount that everyone is aware of this.
Our message to employers is clear – the law on workplace pensions is changing and every employer must act.
The new employer pension duties will be staged between 2012 and 2016, depending on employer size. All employers can know now when the new law will apply to them and they can find this out by visiting our website at www.thepensionsregulator.gov.uk.
We will be using a variety of ways to make employers aware that they need to act. This will range from talking directly to very large employers to writing individually to all employers and working with industry bodies and representative groups of the smallest employers.
There will be many employers which are aware of workplace pension reform already but will need more information on what they need to do to comply. That is why in the coming months the regulator will be providing sources of information and guidance for employers of all sizes.
The regulator is providing support to everyone who is affected by the new employer duties. We will shortly be publishing detailed guidance for bigger companies, their advisers and intermediaries and targeted information specifically for payroll software providers.
We also know that one of the biggest challenges will be getting our message across to smaller employers which have not previously been involved in pensions. That is why later in the year we will be placing simple interactive tools on our website suitable for smaller employers and those with lower levels of awareness of the reforms.
Our aim will be to establish a pro-compliance culture – supporting employers and making it as straightforward as possible to comply but also making it clear that wilful or persistent non-compliance will result in regulatory action being taken.
This month, we will be sending the first of our individual letters to each of the biggest employers in the country.
This will notify them that they have 18 months to go before their staging date. All the biggest employers will hear from us 18 months prior to their staging date and every employer in the country – irrespective of size – will get a letter from the regulator 12 months and three months before they need to comply with the pensions reform changes.
Over the next months, we will start to meet the challenge of educating and enabling all employers to comply with the new workplace pension law. There is a long road ahead and education willplay a crucial role in making these reforms a success.