The Department for Work and Pensions (DWP) has set out recommendations to improve The Pensions Ombudsman’s (TPO) services and distance it from the Financial Ombudsman Service (FOS).

It suggested developing TPO’s government and performance framework to “reflect the increasing size, complexity and maturity” of its work.

The review also recommended that the ombudsman employs a chief operating officer and two non-executive directors to provide additional insight to the service.

The department acknowledged that there was an overlap in the areas of jurisdiction between TPO and the FOS but did not believe there was a strong case to merge the two services.

However, it did agree that a merger would be possible to establish a centre of pensions expertise in the FOS, or bring all pensions cases into TPO, but decided that, without changes to the underlying framework, it would cause too much operational risk and create limited savings.

It also recommended ensuring that the DWP and TPO take a more “robust approach” to coping and tracking efficiencies and realise the potential to streamline the case handling process.

Furthermore, it suggested building on the outward facing engagement of TPO, to “position the organisation more strategically, working with other relevant organisations to enhance TPO’s impact on raising standards more broadly in pensions administration”.

Despite the recommendations, the DWP said that it is not suggesting any fundamental changes to TPO’s functions or remit and found that the service was a “well-respected and effective organisation”.

It continued: “We heard particularly strong support across the board from all the stakeholders we consulted for the quality, clarity and impartiality of its determinations on pension disputes.

“It is particularly commendable that TPO has continued to speed up and improve case clearance times, whilst embracing an ambitious internal change agenda.”

Although the DWP did not recommend any fundamental changes, it admitted that there was a “clear case” for addressing the overlap in jurisdiction between TPO and the FOS.

“We make initial proposals to build a better evidence base for considering the options to resolve this, as a matter of proper public administration and as future legislative priorities allow,” it said.

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