Pensions minister Steve Webb has rejected calls to merge the two existing pension regulators into a single body
Speaking to the Commons work and pensions committee yesterday Webb said now was not the time to start 'carving up' supervisory bodies.
Pensions regulation is currently split between The Pensions Regulator and the Financial Conduct Authority. Last week, Mark Hyde Harrison, outgoing chair of the National Association of Pension Funds, said the time has come for a single regulator, and the work and pensions committee also came out in favour of the idea in a report published in April.
But, comparing the two regulators, Webb noted that TPR was employer focused, while the FCA focused on products and the individual.
Acknowledging that the work of the regulators would overlap, he said it was also important 'to work together' given that the FCA had only been formed six months ago. He told the committee that he was 'optimistic' that new FCA pension head Nick Poyntz-Wright would deliver the work that was needed.
Although Webb admitted that there was a risk of gaps in the current regulatory framework, he told the MPs that he didn't think putting regulators under one roof would be 'a panacea'.
He added: 'You still have to make sure a particular process is regulated by somebody. Even if there was one regulator there could be regulatory gaps. So there is a danger that we just say job done because we've just merged them and they have one logo and one building but there is still different people doing different jobs.'
Meanwhile, Webb said the Department for Work and Pensions would shortly be releasing a consultation in response to the Office of Fair Trading report into the defined contribution pensions market. Webb said that he believed there was a strong case for a cap on the charges imposed by DC pension schemes on members, both active and deferred.
The committee also quizzed Webb on pension liberation fraud. He told the MPs that the government had 'turned the corner' in the fight against bogus pension liberation schemes.
Webb praised HM Revenue & Customs' changes, which came into force on Monday and will introduce pre-approval checks before pension funds are set up and easier de-registration mechanisms where fraudulent pension funds are found.
He said: 'We have taken a big step forward this week, the police action over the summer was really positive, the [communications] are positive. I think we may be turning the corner on this.
'But will there ever be a day when we can say [fraud] has stopped? I doubt it but we hope it is turning the corner and I think it has peaked.'
Webb said, according to TPR, around £420m had been involved in pension liberation transfers and there were 27 open cases of pensions liberation fraud cases with the regulator.
MPs also questioned Webb about lifting Nest restrictions and the £1.4m Nest fraud earlier this year.
Webb said that he would 'love' to lift the restrictions tomorrow but was keen to avoid a 'period of limbo' for fear of legal challenges.
Sarah Healey, DWP's director for private pensions, added: 'Nest alerted us to the fraud as soon as it had taken place, it conducted a thorough investigation into how it came about, and it has improved its internal controls because of it.'
