Pensions minister Steve Webb has ruled out introducing a single regulatory body for DB and DC pensions in the foreseeable future.
This comes despite a parting shot from outgoing NAPF chairman Mark Hyde Harrison on Wednesday calling for one unified regulator to oversee the industry, rather than the existing duo of The Pensions Regulator (TPR), which oversees defined benefit plans, and the Financial Conduct Authority (FCA), which regulates defined contribution funds. Addressing the NAPF Annual Conference, Hyde Harrison said it can “only be a matter of time before we move to a single regulator for pensions”.
But while Webb admitted there were regulatory issues the government needed to address, including the overlap of the bodies involved in overseeing UK pensions, he said now was not the time to make drastic changes, adding it was “not in his in-tray”.
He said: “In the midst of auto-enrolment, the end of contracting out, worries about pensions liberation fraud, tackling small pots, is now the time to restructure the regulatory regime? No. On balance ‘no’ would be my answer.
“There are certainly issues we need to address about the TPR/FCA/DWP/Treasury overlap: are there gaps? Are there overlaps? Are they working together as well as they should be? I have regulatory meetings with those four parties and at the moment the idea of writing a new regulatory regime is not in my in-tray.”
However, Webb did say the Department for Work and Pensions will “soon” be issuing a consultation document in light of the Office for Fair Trading’s report that will set out options for tackling issues around excess charges.
Webb said: “In a world where the government has created a provider with a public service duty to provide pensions at the equivalent of 50 basis points, why should anybody be automatically enrolled and have their money invested by default into something that charges twice as much? Maybe there is a reason for that but I haven’t heard one.”
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