Barnett Waddingham believes 2018 would be the best time for a merger of the two pension regulators when the current auto-enrolment programme is complete.
This follows the pensions minister’s suggestion that the industry should have a single pensions regulator.
During the second reading of the Pensions Schemes Bill in the House of Commons yesterday (2 September), Steve Webb responded to a question about the regulation of “defined ambition” risk-sharing schemes that it proposes to introduce.
He conceded that his experience in drawing up legislation over the past year had led him to the conclusion that a single regulator would be the eventual destination – although now was probably not the time to contemplate the upheaval this would create.
In simple terms, the Financial Conduct Authority regulates personal pensions and the Pensions Regulator regulates workplace pensions.
Malcolm McLean, senior consultant at Barnett Waddingham, said: “The view of many in the pensions industry is that the big increases in defined contribution pensions brought in by auto-enrolment will mean that the current regulatory split will become more and more unbalanced and unsustainable over time.
“In my view it would be beneficial and less confusing to everyone, not least the scheme members themselves, if the clear overlap between the two bodies were eliminated by merging the functions as soon as possible.
“The only question seems to be when not whether a single regulator will be created. An appropriate time might be in 2018 when the current auto-enrolment staging programme is complete although to remove further uncertainty the detailed plans need to be drawn up and announced well in advance of then.”
A Pensions Regulator spokesperson told FTAdviser regulatory architecture is a matter for government. “We are working with the Department for Work and Pensions and Financial Conduct Authority to enable high quality provision and ensure consistent levels of protection across the DC pensions landscape.”
The FCA declined to comment.
