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The Report calls on the Government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions. Noting concerns over current gaps in regulation and the potential for further gaps to arise as a result of now having three regulators with a role to play, the Report argues that a single regulator is necessary to ensure that all members of workplace pension schemes are adequately and consistently protected.
The Report also highlights that deferred-member charges and member-borne consultancy charges have the potential to cause serious consumer detriment. It recommends that both are banned by the Government, if significant progress is not made in the very near future by the industry towards ending them.
Dame Anne Begg MP, Chair of the Work and Pensions Select Committee, said: “Under auto-enrolment millions of people will be brought into pension saving for the very first time. The need for rigorous pension scheme governance has never been more vital. It is essential that all members of workplace pension schemes are protected from poor governance, irrespective of the particular scheme they are in. We do not believe this is always the case under the current regulatory system and evidence from the regulators failed to convince us otherwise. On the contrary, we are concerned that current gaps in regulation will be exacerbated by the fact that we now have not two, but three regulators involved – The Pensions Regulator; and the new Financial Conduct Authority and Prudential Regulation Authority, set up to replace the FSA. The Government should reassess the case for establishing one body with sole responsibility for regulating workplace pensions. This body must be invested with sufficient powers to ensure that all members of workplace pension schemes are given the level and consistency of protection they need.“