UK industry cold on FSA, pension regulation merger
UK - Industry representatives have taken a negative view of a proposed merger of the FSA and pension regulation bodies.
Paul Thornton, a former Watson Wyatt senior partner, has published his first compilation of submissions for his review of pension institutions.
He was appointed by the government in January to initially collect views on the question of whether or not to merge the Pensions Regulator with the Pension Protection Fund or to merge the pension bodies with the FSA
The responses Thornton gathered show some evidence that industry participants consider the merger of the Pensions Regulator and the PPF a sensible step. One point mentioned is that a combined body would "itself have to raise the levy to finance the cost of the schemes which enter the compensation fund" and would therefore "have more immediate incentives to consider any alternative to this option".
However, the paper indicates that the PPF strongly opposes a merger such a short time after setting up the two separate bodies in 2005.
Very few arguments were given in favour of a merger with the FSA. It is mentioned that "it does not seem appropriate to follow other countries where pension funds and insurance supervision is under a shared umbrella, as their pension arrangements typically have a different legal constitution and history."
The consultation paper issued by Thornton can be viewed on http://www.dwp.gov.uk/pensionsreform/institutional_review.asp
The deadline for responses is 30 March.