A report by the National Audit Office criticising the lack of co-ordination between the Government and regulators could pave the way for a merging of the roles of the FSA and The Pensions Regulator.
The report into the regulation of defined contribution schemes, published today, says the Treasury and the DWP should work with the FSA and TPR to develop “overarching objectives” for the regulation of defined-contribution pensions.
It also calls for a more integrated framework for assessing risks to member outcomes and to measure performance against objectives across the entire regulatory system.
National Audit Office head Amyas Morse says: “Responsibilities for regulating pensions are shared, and the agencies involved need to develop a concerted approach to assess and, where necessary, act upon risks.
“The DWP and the Treasury should therefore work with The Pensions Regulator and the Financial Services Authority to develop a more integrated approach to collecting evidence, assessing risks to members, and measuring the effectiveness of pension regulation.”
Hargreaves Lansdown head of pensions research Tom McPhail (pictured) was part of a five person panel which the NAO consulted during the review.
He says: “I think there is a burgeoning case to be made for merging the regulatory activities of FSA and TPR.”
Responding to the report, TPR says: “We believe that the regulator has already taken a significant step towards a more integrated approach by proposing our principles and features for DC schemes as they apply to both trust-based and contract-based schemes and have been developed in cooperation with the FSA.
“Nevertheless, if central Government decides to review its approach to DC regulation in the manner proposed by the NAO, the regulator will play a full role in support of their work.”
A DWP spokeswoman says: “Government departments and agencies responsible for pension regulation work closely together at senior level to ensure a robust system to protect pension savings from mismanagement is maintained.
“We will consider the recommendations in this report to see how we can further strengthen this work.”
A FSA spokeswoman says: “We welcome the NAO report and we will consider its recommendations as we take forward our work with TPR.
“We already work closely with the the Treasury, DWP and TPR and meet regularly to discuss issues of common interest.”