The number of people contributing to work-based private pensions schemes has declined in recent years, but some 4 million people remain active contributors. Approximately 20 million people have contributed at some point in their lives, and the value of the funds managed by final salary schemes alone exceeds £700 billion.

The Pensions Regulator (TPR) was established in April 2005 to regulate work-based pensions. It replaced the Occupational Pensions Regulatory Authority (Opra), on which our predecessors reported in 2003.[1] Their report found that Opra's regulatory arrangements failed to address major risks to pension scheme members and recommended changes both to Opra's objectives and functions, and the way in which Opra operated.

Since its establishment, TPR has acted to put the regulation of pension schemes on a firmer footing. It now takes greater account of risk in deciding where best to focus its regulatory work and has stronger powers to obtain information and intervene to protect members' benefits. There are signs of improvement in the adequacy of the funding of final salary pension schemes.

However, TPR has made a slower start in the regulation of money purchase schemes, and much remains to be done in improving standards of scheme governance and communications with members. Further work is also needed to improve the information held by TPR about schemes and to use this information to target regulatory effort at individual schemes. It must also use its new powers, and clearly explain the reasons for their use, in order that the pensions community understand its expectations. In a field such as pensions, with long term liabilities subject to short term volatility, TPR will need to be alert to the scope for new problems and risks to emerge.

On the basis of a Report by the Comptroller and Auditor General,[2] we examined TPR's progress in establishing a new regulatory approach since its establishment in 2005.