Diplomat, thought leader and now crime fighter. Regulators carry the heaviest burden of expectation, but Andrew Warwick-Thompson’s shoulders are commendably broad. Louise Farrand meets him

When Andrew Warwick- Thompson stands up to speak at Pensions Insight’s annual Professional Trustee conference – addressing a technically-minded audience that watches the Pensions Regulator’s every move – he appears completely unflappable.

Not that this crowd would want to risk offending Warwick-Thompson, who is the regulator’s executive director for defined contribution, governance, and administration, one of the most important briefs in pensions.

That’s the curse of being a regulator: everyone is polite to your face and critical behind your back. When I ask some contacts what they’d like to ask him, I’m sent swathes of questions on subjects ranging from pension liberation to regulating DC – “but don’t tell him they came from me”.

“We need to up our game significantly”

Taking the stage, Warwick-Thompson tells the audience: “We’ve far too many DC schemes. Way too many. We can’t possibly have an efficient market if you have that many DC schemes.”

He doesn’t pull his punches, continuing: “I want to point out is there is a huge amount of money, around one and a half trillion sterling, invested in pension schemes in the UK. That is not a cottage industry and we should not be running it as a cottage industry.


Current role: Executive director for defined contribution, governance and administration, The Pensions Regulator; affiliate member of the Institute and Faculty of Actuaries

Past roles: Consultant, Duncan C Fraser; equity partner, Bacon & Woodrow (now Aon Hewitt); chairman of Pension trustee board, Mencap

Education: Bryanston School, University of Sheffield, Guildford College of Law

Family: Married to Gillian, with two sons, Oliver and Harry

Outside interests: F1 motor racing (Ferrari), world history

“Trustees of occupational pension schemes have a vital role to play in increasing the quality of their schemes. We can no longer look at pension schemes, particularly DC schemes, and say these are just small, retail products – they’re not. These are big, institutional funds and they’re going to get even bigger as auto-enrolment progresses. So we need to up our game significantly.

After his speech, we sit down in a study at the venue, London’s historic Skinners’ Hall. A lawyer by training, Warwick-Thompson looks at home among the antique desks and regulation green lamps.

He is concerned about high pension charges and what can be done to curb them.

“There is a risk that you get what some people refer to as the waterbed effect”

“I think that there are egregious charging structures and commission structures out there… many in legacy schemes. They’ve not been addressed by the industry, and I think it’s quite right that the government should intervene now to do something about it, whether it’s via a cap or some other means.”

However, he believes a cap could prove complicated.

“Unless you capture all of the relevant costs and charges, there is a risk that you get what some people refer to as the waterbed effect. You squash down on one side of the bed, and it just goes somewhere else. We need to be very careful that doesn’t happen.”

He adds: “I’d hope that folk like Jonathan [Lipkin, from the Investment Management Association] who have some reservations about it, have fed into the consultation. I’d hope that what emerges is something sensible, it addresses the issues that we’ve identified but still allows quality schemes to operate in an environment where it’s okay to charge a reasonable amount providing you’re providing a reasonable level of service.”

Value for money is “the other side of the equation”, says Warwick-Thompson.

“We need some way of measuring the investment experience that the members get from membership of the scheme. You could also put some measures around the quality of the governance and administration.

“I think what will emerge from the costs and charges consultation is probably going to be a more prescriptive approach”

“We’ve done some guidance on this before, but we will produce some guidance for trustees that sets out what costs and charges we think are relevant… contrast those with the services that are being provided to the members – you need to make a judgment then about whether you’re getting value for money.

“That’s a relatively soft approach. I think what will emerge from the costs and charges consultation is probably going to be a more prescriptive approach.”


Warwick-Thompson is also concerned by the proliferation of mastertrusts coming to market. “In principle, mastertrusts are a super idea. We want big-scale schemes.

That’s why we don’t want a proliferation of them… If you fragment the market down to as many as 70, which is possible, then I think we’ll have defeated the object of the exercise.”

“You cannot possibly deliver good member outcomes from small, sub-scale schemes”

Are mastertrusts the future? “You cannot possibly deliver good member outcomes from small, sub-scale schemes. The Office of Fair Trading has pointed that out,” he says.

“We need to try to drive the standards up in all DC schemes, but there’ll be some that’ll not make the grade. I suspect over the coming years, they’ll be the focus of our attention as we try to nurse them gently out of the market.”

Some employers who are engaged with their pension scheme, even the small ones, worry that joining a mastertrust results in a loss of the relationship between a company’s employees as savers and employer as steward of the pension fund. “I don’t think you need lose it,” responds Warwick-Thompson.

“It’s time to refresh what we require trustees to know and understand”

“Our view is that whether you go into a group personal pension or a mastertrust, an engaged employer would probably set up some sort of governance entity of its own. We don’t want to force small employers to do that. But where they really are engaged and want to do that… there’s no reason why they can’t do that through a GPP or mastertrust – they just have to set up their own governance entity.”

Next on Warwick-Thompson’s list are tougher standards for trustees. “The market landscape has changed. I think it’s time to refresh what we require trustees to know and understand. Now whether that goes on to the stage of saying, ‘do we have an exam’, I think we would be happy to have the consultation.”

“There is an active debate going on at the moment within the regulator about whether we need to redo TKU [the Trustee Knowledge and Understanding regime] and if we did, it would have to go to consultation because it’s a code of practice. I wouldn’t be at all surprised if that happened. I think now’s a jolly good time to do it.”


Last year the Pensions Regulator turned crime fighter, in the wake of ‘liberators’ targeting savers and encouraging them to access their pension pots early, often resulting in severe financial losses.

It’s a thorny legal area and trustees feel trapped between a rock and a hard place.

“I’ve sympathy with that,” says Warwick-Thompson. He agrees with the chairman of the Pensions Administration Standards Association Margaret Snowdon’s idea that there should be a code of practice around how administrators deal with the liberation issue.

“There are things you can do right now, but probably some trustees aren’t doing it”

“I’m very happy for TPR to work with her to define what that should be. That then needs to flow through into a code of practice on what trustees ought to do.

“There’s also just the basic stuff that we were talking about today. You send the ‘scorpion pack’ out… You get people to sign a declaration that they understand that there’s a risk and that they discharge their liability. There are things you can do right now, but probably some trustees aren’t doing them. We need to get the message out there: here’s what best practice looks like.”