Labour has stated that the current UK pension regulatory system is “not fit for purpose” and the implementation of a single pensions regulator is one of the options that it is exploring in its policy review to improve the current system.

Shadow pensions minister Gregg McClymont writing in a Fabian Society pamphlet: Pensions at work, that work: completing the unfinished pensions revolution, stated that the current pension regulator’s name “belies its true status” and “it is inadequately empowered to conduct fully effective regulation.”

In the paper, McClymont stated that the other option would be to enhance co-operation between the existing bodies. In addition, the paper also argued that pension companies should be forced to put the interests of savers first and before those of pension providers. It called for more occupational pension funds to be run by trustees, with a fiduciary obligation to put the interests of savers first.

The issue of the pensions industry being a ‘cottage industry’ was also discussed as it is currently fragmented into thousands of schemes which are often too small to operate at a level which will ensure that the members get the best possible deal. Currently, many of those in defined contribution schemes are in plans with under 100 people.

A recent report published by the Work and Pensions Committee entitled Improving governance and best practice in workplace pensions stated that the growth of auto-enrolment within the pensions market has meant that current regulatory arrangements are fragmented and there are significant overlaps in both duties and responsibilities of each regulator.

Fabian Society general secretary Andrew Harrop said: “The last Labour government did much to improve the quality and consistency of workplace pension provision, a legacy that in large part is being neglected by the coalition.

“Ed Miliband’s call for ‘responsible capitalism’ provides the impetus for a fresh look at how workplace pensions should work. We need to end a model that encourages short-term speculation, and prioritises returns for pension providers and financial intermediaries. A new pensions settlement that puts savers interests and long-term economic investment as its heart will make a big difference to the retirements of today’s workers.”

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