25 April 2008
MPs have praised the new Pensions Regulator for identifying schemes where members' benefits are at risk, after damning its predecessor body for 'failing to see the wood for the trees'.
The Pensions Regulator, whose role is to protect the 20 million people who have contributed to work-based pension schemes, took over from the Occupational Pensions Regulatory Authority in 2005.
The Commons Public Accounts Committee had criticised Opra for focusing on 'trivial cases'. MPs warned that they could not be sure the regulator could prevent a repeat of the Maxwell pensions robbery, when newspaper tycoon Robert Maxwell raided the pension funds of his employees.
But in a report published on April 24, The Pensions Regulator: progress in establishing its new regulatory arrangements, the committee praised the risk-based approach of the new watchdog.
PAC chair Edward Leigh said: 'The Pensions Regulator is doing a much better job at regulating the pensions industry.
'Unlike the unlamented Opra, the Pensions Regulator actually has processes for identifying the pension schemes posing the greatest risks to members' benefits.'
But he warned that although the watchdog had made 'good progress' on regulating final salary schemes, it had made 'far less in the considerably riskier area of money purchase schemes'.
The regulator has information on 99% of final salary schemes by membership, but only on 32% of money purchase schemes, the report says.
It adds that although the Pensions Regulator has greater enforcement powers than Opra, it has so far 'made little use of them', nor had it done much to improve members' poor understanding of money purchase schemes — although this is 'a key risk'.