Pension funds have criticised the Office of Fair Tradings September report on defined contribution, saying some of its recommendations did not go far enough.
The National Association of Pension Funds yesterday issued its consultation response to the OFT. It warned that the watchdog's short- and medium- term recommendations on governance and charges could fail to deliver the right outcome for savers.
In particular, the NAPF said placing governance committees at provider level could lead to conflicts of interest, while a ban on active member discounts could penalise consumers whose employers had chosen to pay part of the charges for existing employees.
NAPF's chief executive Joanne Segars said that, although she was agreed with much of the report, the success of the watchdog's short- and medium-term recommendations would depend on how they were implemented by the government and the industry.
'There are several barriers that need to be overcome before we can achieve the right outcomes - especially around governance.'
She said it was essential that the government and regulators bring in policies that ensure sustainable and good DC pension provision in the long term.
'Acting quickly will ensure that pension savers, especially those who will be saving into a pension for the first time through automatic enrolment, benefit from these improvements from the outset.'
Segars added: 'The NAPF believes that governance, transparency of charges, value for money and economies of scale are critical to delivering good workplace DC pensions, so we urge the OFT to continue to monitor progress in the DC landscape.'
The OFT's market study, published on September 19, criticised the current DC pensions as complex and often poor value.
