The government has been told to extend The Pensions Regulator's powers so it can respond more quickly to risks and changes in the sector.
This is the recommendation of Jamey Johnson, chief officer for Pension Wise, who conducted the Tailored Review of The Pensions Regulator, a 43-page document published today (May 16) by the Department for Work and Pensions.
Mr Johnson suggests TPR would be a "stronger more proactive regulator" if it had the power to "create rules governing the details" of what information it requires from schemes.
At the moment changes to how the pensions watchdog conducts its functions needs legislative changes.
Mr Johnson explained that some data requirements are specified in legislation, which means departmental and parliamentary time and cooperation is required to change them.
"This results in some schemes being unable to comply with regulations, because the regulations themselves cannot change at the same pace as the digital world," the review stated.
Last year TPR was heavily criticised by two parliamentary committees over its work on Carillion, with the group of MPs saying the watchdog made "hollow threats" and "failed in all its objectives".
Giving TPR these extended powers would put the organisation more in line with the Financial Conduct Authority, the review stated.
It would also increase the organisation’s strength as a regulator and potentially resolve public confusion over the extent of its powers, it added.
Mr Johnson and his team suggest that the watchdog would have increased effectiveness, as it would be better able to respond to emerging risks.
There would also be better efficiency for the government in terms of time saved for the DWP and parliament, and a "distancing of TPR from political pressures, allowing it to function independently as it is intended to," the review added.
The review also looked at the areas covered by TPR and FCA in their respective areas, and concluded the two organisations were distinct in their missions and would not benefit from being merged into one body.
The document stated that the FCA’s involvement in the pensions landscape is in its regulation of contract-based financial products, which are fundamentally aimed at making a profit.
On the other hand, TPR regulates trust-based schemes, which have an obligation to act in the interest of their members.
"The two markets are therefore different in their basic purposes, and it makes sense to continue regulating them separately," it stated.
The review also analysed the work being done by the two regulators, and recommended that TPR should "proactively monitor delivery against the joint strategy".
Nathan Long, senior analyst at Hargreaves Lansdown, said: "The push for continued close collaboration between TPR and the FCA is hugely positive. People should not be getting different communications or safeguards just because of the type of pension they’ve got. Rightly, all they care about is that they are saving for their future.