He said: “Many bodies are involved in regulating workplace pension schemes. Most people will not know who regulates occupational schemes and who regulates private schemes, so now is probably a sensible time to create one regulator to oversee all aspects of workplace pensions.”
When asked whether this could lead to a significant overhaul of the Pensions Act 2004, he said: “Any change to regulatory frameworks can bring risk and would take time to implement but it’s important that this landscape is appropriate for the products available, and for consumers.”
In the report Dame Anne Begg, chairman of the committee, said the potential for further gaps in regulation was a possibility without the introduction of a new regulator to ensure members of workplace pension schemes were adequately and consistently protected.
She said: “It is essential that scheme members 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 regulators failed to convince us otherwise.”
The report called for:
* Improved scheme governance through committees which would oversee schemes.
* Improved communication by providers.
* A ban on deferred-member and member-borne consultancy charges, which could cause serious consumer detriment.
* Improved government proposals on reforms of small pension pots. It claimed a potential for detriment if the ‘pot follows member’ system allowed individuals to be transferred into less beneficial schemes.
* Regulation to promote good governance on small pots and a stop to high charges.
Adviser View
Phil Castle, managing director of Kent-based Financial Escape, said: “You have to ask why this wasn’t looked at with start of auto-enrolment, or before the changes were made at the FSA. How many times will we have to change our letterheads? Continued changes with the regulators make it very difficult to plan ahead, which is what advisers are all about.”
