Debbie Harrison of the Cass Business School's Pensions Institute is critical of the lack of clarity on how the UK's two new regulators – the Prudential Regulation Authority and Financial Conduct Authority – will interact. "We need a single regulatory system – however that is delivered."
Ms Harrison said she fully supported the introduction of auto-enrolment and that increasing contributions was the best way to ensure adequate outcomes. "But if we are having conversations now about lack of joined-up regulation and what does good governance look like, then it's a big ask to expect people to start paying in more in something we haven't really got full confidence in", she said. "We need a single regulatory system – however that is delivered. I can see the problems of merging the regulators, but that doesn't mean the problem's going to go away. We need a single system, and certainly one whereby whoever is responsible for governance is only focusing on member outcomes – there are no conflicts of interest."
Her comments come after the work and pensions select committee backed the creation of a single body charged with overseeing pensions, rather than responsibility being divided between the Pensions Regulator (TPR) on trust-based and the other existing regulators for contract-based arrangements.
Harrison concluded that while the new arrangement was "very sensible", unless clarity was offered soon, there would be concerns over how best to treat members fairly and how this fits with prudential concerns of the market.
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