Jessica O'ConnorThe Pensions Regulator (TPR) chief executive Nausicaa Delfas has called on the pensions industry to act now to help shape a future workplace pensions system that delivers stronger outcomes for savers by 2036.
Speaking at the Eversheds Sutherland UK Pensions Conference, Delfas outlined a vision of a significantly transformed pensions market, driven by consolidation, greater investment scale, stronger governance and improved retirement outcomes.
Delfas said: “Looking forward is not only interesting, it is essential if we are to act now to shape a system that truly delivers for members.”
She posited that defined contribution (DC) pensions would sit at the centre of the future pensions landscape, with consolidation leading to the emergence of mega-funds operating as major long-term institutional investors, managing close to £1tn in DC trust assets.
She also pointed to a changing future for defined benefit (DB) schemes, referencing The Pensions Regulator’s latest Annual Funding Statement, which found that 80% of schemes are now in surplus on a low dependency basis.
Alongside traditional DC schemes, Delfas said collective defined contribution (CDC) arrangements would play an increasing role in retirement provision, reshaping both risk-sharing and trustee responsibilities.
The speech highlighted that by 2036, retirement saving and retirement income would become more integrated, with scheme-led retirement pathways designed to balance flexibility with predictable income.
Delfas also warned that larger schemes and greater scale would require significantly higher standards of governance, trustee capability, administration, operational resilience and data management, bringing expectations closer to those applied to systemically important financial institutions.
Artificial intelligence (AI) was identified as one of the major opportunities facing the pensions sector over the next decade, although Delfas stressed that human judgement would remain critical.
Delfas said that trust remains the pensions system’s “most valuable asset” and that AI must support human judgement, not replace it.
The speech also referenced wider pensions reforms currently underway, including measures contained in the Pension Schemes Act, the forthcoming interim report from the Pensions Commission and The Pensions Regulator’s upcoming Corporate Strategy consultation, due to launch during the week beginning 11th May.
