Senior industry figures have warned that the UK’s multi-regulator pension supervisory regime risks causing confusion for employers auto-enrolling members into a workplace scheme.
Under the current system, pensions regulation is divided between the FSA, which supervises retail products, and The Pensions Regulator, which regulates occupational pension schemes.
Under the new twin peaks regime, which is due to come into force in the first half of 2013, supervision of product regulation will be handed to the Financial Conduct Authority.
Speaking at TheCityUK’s pension conference in London last week, Association of British Insurers director general Otto Thoresen said: “Regulatory confusion is a concern ahead of automatic enrolment. Even we as experts find it hard to track who is regulating what, so there is a real issue for the future there.”
FSA consumer panel vice-chair Kay Blair said: “When you have so many different regulators, there is always a possibility of there being gaps or duplication. Should there be one single regulator? Possibly, although I am not sure that would necessarily guarantee effective regulation.
“For pensions, there has to be joined-up thinking, whether that is through a single regulator or through better communication between regulators.”
Which? campaigns team leader Doug Taylor said: “I do think there is an issue about whether The Pensions Regulator’s objectives are in line with those of the FSA.
“It strikes me that in a world of auto-enrolment, where people will one day be in a contract-based scheme regulated by the FSA and the next day a scheme regulated by The Pensions Regulator, there ought to be a level of congruity between the two. We need to have a debate to ensure there is a level of symmetry, although I am not sure they should merge.”
Responding to the debate, TPR chief executive Bill Galvin said: “It is not our intention to duplicate anything that the FSA does.
“If we ask providers in the contract-based space to focus on something, it will be because it is legitimately in our interests to ask them to focus on that and may fill some gaps that we feel are important.”