Steve Webb has defended the UK government’s decision to leave the current regulatory environment – whereby pension matters are jointly overseen by the Financial Conduct Authority (FCA) and the Pensions Regulator (TPR) – unchanged, insisting the idea of reforming the system was “not in my in-tray”.
The pensions minister’s comments come shortly after outgoing National Association of Pension Funds (NAPF) chairman Mark Hyde Harrison said the split was “increasingly unsustainable” in light of auto-enrolment.
Webb reasoned, while addressing the NAPF annual conference in Manchester, that in light of the number of changes already underway within the UK pension system, it was not the right time for a wholesale reorganisation.
“Let me ask a rhetorical question,” the Liberal Democrat MP said. “In the midst of automatic enrolment, the end of contracting out, worries about pensions liberation fraud, tackling small pots and a big upheaval generally and all of that, is now the time to restructure the regulatory regime?”
He said that, “on balance”, his view was it was not the right time for change, but admitted there were “certainly” issues within the current arrangement that saw areas of the pensions market overseen by his own Department for Work & Pensions (DWP), the Treasury, the FCA and TPR that needed improving.
But he added: “At the moment, the idea of writing a new regulatory regime is not in my in-tray, I have to say.”
His comments come after Hyde Harrison, now succeeded by Rushton Smith as the group’s chairman, insisted that reform was needed, despite the difficulties it could entail.
The former chief executive of the Barclays UK Retirement Fund said that, due to auto-enrolment – which allows both FCA-regulated, contract-based arrangements and trust-based schemes overseen by TPR to be used – the split would “become increasingly apparent – and increasingly unsustainable”.
“Any shift won’t be easy – I recognise that,” he said during the conference’s opening address. “But it doesn’t mean we should dodge the issue.
“The priority has to be ensuring better and fairer pensions for people. We need the right regulatory environment to help us achieve that.”