An influential committee of MPs has questioned whether the Financial Conduct Authority should continue to regulate contract-based pension schemes and called on the Government to consider establishing a single regulator for workplace pensions.
Regulation of pensions is currently split between the FCA, which regulates contract-based schemes, and The Pensions Regulator, which is responsible for regulating all workplace pensions including trust-based DC schemes.
The Work and Pensions select committee published a report last week warning that persisting with the current framework could lead to “gaps” in regulation, potentially putting members’ savings at risk.
The report says: “We are not convinced that the Financial Conduct Authority…is the appropriate body to regulate contract-based pension schemes.
“If it remains the responsible body, then we strongly urge it to adopt a pensions-specific regulatory strategy and to set up a well-resourced team dedicated solely to proactively regulating contract-based pension schemes.
“We believe it is necessary for a single regulatory body to have sufficient powers to ensure that all members of workplace pension schemes are given adequate and consistent protection. We therefore recommend the Government reassess the case for establishing one body with sole responsibility for regulating workplace pensions.”
Hargreaves Lansdown head of pensions research Tom McPhail says: “There are far too many regulatory bodies involved in UK pensions and the result is a bit of a mess.
“The only workable answer is to roll all of The Pensions Regulator’s activities into the FCA and for the FCA to have sole responsibility for all aspects of the pensions system.”
A DWP spokesman says: “The committee’s report addresses a number of issues we are looking at to ensure people continue to have access to value-for-money pensions.”