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The role of The Pensions Regulator

Regarding the article headed Dual-regulation fears for pension companies (Money Marketing, February 1), the consultation on how The Pensions Regulator intends to regulate definedcontribution schemes does not set out to “expand our remit”. It is already part of our remit under the Pensions Act 2004 to regulate occupational DC schemes and group personal pensions as well as ensuring employers provide stakeholder schemes.

Regarding the issues raised over potential “dual regulation”, the FSA has little direct regulatory responsibility for trust-based occupational schemes.

The areas of interest for the FSA include sales, marketing and prudential management. The Pensions Regulator’s remit involves employer payments and scheme administration. A key part of our regulatory approach is working with other regulatory bodies and industry partners.

The article states that, under the proposals, we will “have the power to ban trustees.” In fact, we already have this and other powers as set out in legislation. The consultation does not, and could not, change these powers, as this is a matter for Parliament. The consultation seeks to increase clarity on when we would use these powers in the DC environment.

We address the risk of unduly high charges as these can have an impact on members’ benefits and should be proportionate, provide value for money and be transparent. We simply ask that charges are considered at scheme set-up and at regular periods and that information be issued showing the impact of costs on the scheme.

Regarding the concern that savings will be invested in gilts, it is not part of our role to tell trustees or providers what they should invest in and this will be a decision for them dependent on the circumstances.

Our focus is on there being effective processes for the preparation of investment mandates, selection of investment advisers and performance monitoring.

John Ashcroft,
Head of strategy,
The Pensions Regulator

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