Our model is built on structural independence from strategic advisory services — investment management, actuarial advice, covenant assessment, and endgame strategy. In some appointments we also provide governance support services such as secretariat alongside trusteeship; where we do, we manage the procurement conflicts that arise through transparency, competitive processes, and appropriate recusal.

We engage with TPR’s full strategic agenda. We have most to say on governance and trusteeship but offer substantive observations on DC retirement income, the VFM Framework, and technology governance — areas where our perspective across a large and diverse portfolio is directly relevant.

Question 1: Is TPR’s vision of “a sustainable retirement income for all” the right long-term ambition?

Yes. The shift from measuring success by participation to measuring it by the income people actually receive in retirement is overdue and correct. TPR’s data makes the scale of the challenge plain: 14.6 million working-age people not on track for adequate retirement; a gender gap leaving women at mid-life with around half of what their male peers have saved; minority ethnic pension wealth averaging less than half that of white British savers; only one in four DC savers with a plan to access their pension. The system has succeeded in getting people into saving. It has not yet succeeded in turning that saving into secure retirement outcomes.

We strongly endorse the system-wide framing. A trustee board’s ultimate accountability is not to its compliance record but to the outcomes its members receive — for DB members, at the very least the benefits they have been promised; for DC members, an adequate, realvalue income throughout retirement — not merely a technically positive cash flow, but one that supports a reasonable standard of living and retains its value over time. That reorientation should drive how governance is defined and assessed. But we note that trustees alone cannot deliver this: contribution rates and scheme design sit with employers, member behaviour matters, and TPR sets the framework. The ambition of adequate retirement income is a shared responsibility across the whole system, and TPR’s strategy should be explicit that it is the system as a whole that will be measured against it.

The persistent outcome gaps by gender, ethnicity, disability, and employment status are not merely distributional concerns — they reflect structural features of the system that trustees, regulators, and government need to address together. Scheme design and contribution structures are primarily in the gift of employers, not trustees. But trustees have a direct interest in member outcomes and a responsibility to engage constructively where design choices affect the adequacy of the benefits members ultimately receive. Closing these gaps will also require deliberate focus on retirement income pathways — not only disclosure and data.

Question 2: Are consolidation, scale, technology, digitalisation and AI the most significant forces shaping the sector?

Broadly yes. We would add one further force: the commercialisation of trusteeship, and the structural conflicts of interest it generates. As the pensions market consolidates and commercial stakes in trustee appointments rise, conflicted governance — rather than absent governance — becomes an increasingly prominent risk to member outcomes. We return to this in Question 3.

On consolidation: fewer, larger, better-resourced schemes should in principle deliver better outcomes, although at the very large end there appears to be no evidence of a correlation between size and performance. The risk is that scale concentrates rather than resolves conflicts where governance is not genuinely independent, and that concentration in a small number of large providers creates new systemic risks. TPR’s market-shaping tools — VFM Framework, authorisation regimes — are critical to ensuring consolidation serves members rather than commercial interests.

On technology and AI: the governance challenge is ensuring trustee oversight of technologydriven decisions is substantive, not nominal. Trustees need to interrogate AI-assisted outputs, challenge providers, and exercise genuine fiduciary judgment — not ratify recommendations from systems they do not understand. We address this further in Question 3.

On the reform agenda: the Pension Schemes Act 2026 and the emergence of CDC represent genuine structural change. Getting governance frameworks right for CDC — including authorisation, supervision, and the management of intergenerational equity decisions — will be important work for TPR over this strategy period.

Question 3: Where could TPR’s role become more targeted or proactive?

We address five areas, drawing on direct experience across our portfolio. All five reflect TPR’s own stated outcomes — member and market — and are intended as a substantive contribution across the full agenda.

3.1 DC retirement income — governing the transition from saving to income

This is rightly TPR’s central challenge. Only one in four DC savers has a plan as to how they will access their pension; too many face drawdown risk, longevity risk, sequencing risk, and the tax consequences of full encashment. From our experience as trustee across eight authorised DC Master Trusts and a wider range of DC arrangements, three areas stand out for more proactive TPR engagement.

Default retirement income design. Most DC members will make their retirement decision through the default pathway. TPR should be explicit that trustee boards are expected to actively design, monitor, and improve default decumulation strategies — not simply offer them. Clear regulatory expectations on what good default design looks like, including how it accounts for different member profiles, and manages sequencing and longevity risk, would drive material improvement.

At-retirement engagement. Most members engage very little with their options, defaulting into whatever is simplest. By the time a member reaches retirement, the window for shaping outcomes has largely closed. The more productive focus is pre-retirement engagement — particularly at about five years before retirement, when members are beginning to think concretely about their options and are more receptive to meaningful guidance. Trustee boards should take responsibility for the quality of that engagement, not merely for what happens at the point of access. TPR should also encourage trustees to be bolder in navigating the advice/guidance boundary — the current conventions are too cautious and leave members underserved. TPR could strengthen its expectations and use supervisory engagement with Master Trust boards to identify and embed good practice.

CDC governance. CDC offers a genuinely different model for retirement income — pooled longevity risk, and potentially better long-term income prospects than individual drawdown for many members. Scheme design remains in the hands of employers and scheme sponsors, and trustees are not the architects of CDC. But trustees do have a direct interest in good member outcomes, and the governance frameworks for CDC are squarely within trustee responsibility. LawDeb is actively building expertise in CDC governance. TPR should be proactive in shaping governance standards early, drawing on DB disciplines while recognising that CDC presents distinct trustee decisions around income targeting, smoothing, and intergenerational equity. The Dutch experience is instructive on communications in particular: when pension reductions occurred under the Dutch collective model, members reacted negatively because they had unmanaged expectations over their benefits. The principal lesson for UK CDC governance is not that smoothing is inherently wrong, but that member communications must be honest and consistent from day one — setting out clearly that income targets are not guarantees and that adjustments are possible. TPR’s governance standards should make this a core trustee obligation.

Recommendation: TPR should develop explicit governance expectations for DC default retirement income design and pre- and at-retirement member engagement, including by encouraging trustees to be bolder in navigating the advice/guidance boundary. For CDC, it should work proactively with early schemes to establish governance standards specific to the model’s decision-making challenges — in particular requiring that member communications make clear from the outset that income targets are not guarantees and that adjustments are possible.

3.2 Value for Money — making the Framework deliver for members

LawDeb engaged substantively on VFM framework design in our response to the FCA’s CP24/16 consultation. Several of the observations we made there were reflected in CP26/1 (January 2026) — a joint FCA and TPR document that serves both as the FCA’s response to CP24/16 and as a discussion paper for the trust-based framework — notably the introduction of forward-looking metrics alongside backward-looking data, a reduction in the data burden on providers, and a move to a wider commercial comparator group. As the detailed trustbased framework is now developed by DWP and TPR through secondary legislation under the Pension Schemes Act 2026, we draw on that experience to offer four observations on design choices that will determine whether the Framework delivers for members.

Trustee independence is material to assessment quality. VFM assessments are only as robust as the governance behind them. Where trustees have affiliated interests in the investment managers or administrators being assessed, there is a structural tension between rigorous challenge and commercial relationship preservation. TPR should treat independence from assessed providers as a material factor in its assessment of VFM governance quality — not merely a disclosure requirement. This applies with particular force to assessments of investment performance and cost, where a trustee affiliated with the assessed manager faces the sharpest conflict.

Forward-looking metrics must be fully embedded in the trust-based framework. LawDeb advocated in CP24/16 for forward-looking risk and return metrics to supplement backward-looking performance data, and we welcome their inclusion in CP26/1 for contractbased arrangements. Risk needs to be fully integrated into the framework. There is a danger that a VFM framework that is primarily based on returns, not risk adjusted return, will lead to excessive risk taking. Backward-looking metrics alone risk mismeasuring current strategy quality — particularly given that recent public market conditions may not persist and that providers and trustees are actively shifting toward more diversified, longer-duration strategies. For the trust-based framework, equivalent treatment is essential: trustees and employers should be able to assess whether current investment strategy is positioned for long-term value, not only whether past performance compares well in a favourable market environment. A single set of mandated assumptions, however, risks driving herding — every provider using the same inputs to optimise the same forward-looking return numbers, in practice incentivising convergence toward identical (and potentially overweight) illiquid allocations. The more productive approach is for TPR to collect the assumptions used by each scheme, identify and engage on outliers, and require master trust boards to obtain independent advice on their assumptions. This preserves genuine differentiation while providing a check on potentially self-serving inputs.

The private markets disincentive must be addressed explicitly. A framework that compares costs without adequately accounting for J-curve dynamics risks systematically disincentivising investment in productive finance assets — private equity, venture capital, private credit, infrastructure, and unlisted securities. Higher costs in the early years of such allocations will make an arrangement appear relatively expensive against peers that have not made those commitments, even where the long-term risk-adjusted return is superior. This tension directly conflicts with the Government’s productive finance agenda. If VFM metrics penalise J-curve cost profiles, trustees will hesitate to allocate to productive finance and give them a reason to use the savers’ interests exemption should government seek to compel it using the mandating power introduced by the Pension Schemes Act 2026. This applies most acutely to master trusts and GPPs in scope for mandation, but the underlying disincentive to productive finance investment applies across the trust-based market.

Consolidation should follow quality, not drive herding. The principal driver of herding is not asset allocation disclosure but the use of realised and prospective returns within a blunt rating system. A scheme that fails to achieve a green rating on performance faces material consequences for its ability to take on new members or AuM — regardless of the reasons for that relative performance. A below-green rating should trigger TPR engagement to understand why, and any decision about whether a scheme should be permitted to take on new AuM should follow from that informed dialogue, not from the rating alone. The four-point scale in CP26/1 is an improvement on the original RAG, but the structural incentive to converge on the median — and the disproportionate market consequences of falling short — has not been resolved.

Recommendation: As TPR develops the trust-based VFM framework through secondary legislation under the Pension Schemes Act 2026, it should treat trustee independence from assessed providers as a material governance quality factor. It should ensure forward-looking metrics are included on an equivalent basis to the contract-based framework; it should collect and scrutinise the assumptions used, engaging on outliers and requiring independent advice for master trust boards on their forward-looking inputs rather than reliance on their own strategists. It should address the J-curve disincentive to productive finance investment explicitly — recognising that poorly designed metrics will make trustees hesitate to allocate to productive finance and give them reason to use the savers’ interests exemption should government seek to compel such investment through the Pension Schemes Act 2026 mandating power. On herding, TPR should treat a below-green VFM rating as a trigger for engagement and informed dialogue rather than an automatic bar on taking new AuM — and should be prepared to revisit the rating framework if convergence toward median positions begins to reduce genuine choice and innovation for members.

3.3 DB endgame — governance at the moment it matters most

The endgame decision landscape has expanded materially. Buy-out, buy-in, run-on, superfund, and hybrid approaches are all live options for many schemes, alongside new surplus provisions and DB investment flexibilities. Trustees need the capability, advice quality, and governance frameworks to evaluate these options rigorously and make decisions that genuinely serve members’ long-term interests.

TPR can help by being clear about its expectations for endgame governance: what a robust journey plan looks like, what due diligence is required before a superfund transfer or bulk annuity transaction, and how it will oversee schemes choosing run-on. The strategy commits to overseeing DB superfunds to high standards — we support that, and would encourage TPR to be equally explicit about its expectations for trustees navigating the endgame decision itself, not just the vehicles they might use.

Endgame decisions are also precisely those where a trustee affiliated with an advisory business faces the sharpest structural conflict. A trustee connected to an actuarial firm advising on buyout pricing, or to an investment manager with assets at stake, cannot provide the unconflicted judgment members need at the most critical juncture of a scheme’s life. This conflict is structural — it cannot be resolved through disclosure or recusal.

Recommendation: TPR should develop explicit governance expectations for DB endgame decision-making, covering journey plan quality, endgame vehicle due diligence, and conflict management at critical decisions. Trustee independence from advisers with a commercial stake in the outcome should be addressed directly in that guidance.

3.4 Technology and AI — ensuring governance keeps pace

The central risk is that AI will be adopted without sufficient trustee challenge of the outputs it generates. Investment algorithms, administration automation, and data analytics are already shaping scheme decisions. As these tools become more sophisticated, the risk of trustees becoming passive recipients of AI-generated recommendations will also grow.

Three areas warrant particular attention in TPR’s forthcoming AI approach paper.

Data quality as precondition. AI decision-making is only as good as the underlying data. Trustees need to be equipped to assess and challenge data quality frameworks, not simply receive analytics outputs. The dashboards and data infrastructure TPR is building are essential foundations here.

Vendor governance. As AI tools are increasingly provided by third parties — investment managers, administrators, technology platforms — trustees need the capability to scrutinise vendor systems and challenge providers. This requires full transparency from providers, technical literacy and, critically, genuine independence from the vendors whose outputs are being assessed.

Accountability and explainability. Trustees carry fiduciary responsibility for decisions that AI may increasingly take or inform. Governance frameworks must ensure trustees can articulate why a decision was made — the “black box” problem is a governance problem, not just a technology one.

Recommendation: TPR’s AI approach paper should address trustee governance of AIassisted decision-making explicitly — including data quality oversight, vendor scrutiny, and accountability frameworks that ensure trustees retain genuine fiduciary responsibility for AI-informed decisions. Trustee capability standards should evolve in parallel with the growing role of technology in scheme governance.

3.5 Trusteeship standards — defining genuine independence

TPR commits to publishing a governance paper on trusteeship and administration standards. The most important thing that paper can do is establish an operationally meaningful definition of trustee independence — one that goes beyond “professional trustee” as a broad category.

Independence must be defined structurally, not declaratorily, and must focus on strategic advisory services. A trustee firm is truly independent where it has no commercial affiliations — direct or through a parent or sister company — with firms providing strategic advisory services to its schemes: investment management, actuarial advice, covenant assessment, pension administration, or endgame strategy. Where such a relationship exists, the trustee’s ability to scrutinise and challenge that advice is structurally compromised — regardless of disclosure, internal separation, or conflict management protocols.

This is categorically different from providing governance support services — secretariat, project management — alongside trusteeship. These may create procurement conflicts that can be managed through transparency and competitive processes. The regulatory framework should reflect this distinction: preventing strategic advisory conflicts, providing clear standards for managing support service conflicts.

“Professional trustee” currently encompasses three fundamentally different models: genuinely independent firms, integrated advisory businesses where trusteeship sits alongside — or is cross-subsidised by — investment, actuarial, or administration work, and sole independent trustee practitioners. These carry categorically different conflict profiles and warrant risk-stratified regulatory treatment. TPR’s oversight framework should be calibrated accordingly. The DWP governance and trusteeship consultation has engaged directly with this distinction; we encourage TPR’s governance paper to build on that framework.

Recommendation: The governance paper should define “truly independent trustee or independent trustee individual” with structural precision, distinguishing it from the broader “professional trustee” category. The oversight framework should be risk-stratified with conflict profile as a primary determinant of supervisory intensity. Trustees (or individuals) should be required to certify — and TPR to verify — that independence from strategic advisory services is structurally, not merely procedurally, maintained.

Conclusion

LawDeb strongly supports TPR’s strategic direction. The shift to a system-wide, outcomes focused approach to regulation — with sustainable retirement income as the ultimate measure of success — is the right framework for the decade ahead.

Across the five areas in Question 3 — DC retirement income, VFM, DB endgame, technology governance, and trusteeship standards — targeted regulatory action can make a material difference to member outcomes. We are ready to work in partnership with TPR to deliver its vision and welcome the opportunity to contribute to the governance paper, the AI approach paper, and the other workstreams that follow from this strategy.

We are happy to discuss any aspect of this response directly. DO reach out to emma.sinnamon@lawdeb.com with any questions.

Law Debenture Pensions- Natalie Winterfrost, Head of Pensions

June 2026

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