UK pensions ombudsmen to be merged
UK - Retail and institutional pensions regulatory bodies will remain separate but the UK pensions ombudsmen's offices will be merged, minister for pension reform James Purnell has announced.
Paul Thornton's independent review of parts of the UK pension system, released earlier today, recommended the Pensions Ombudsman "should be fully integrated" within the retail-oriented Financial Ombudsman Service, "to provide the advantages that a larger organisation brings in terms of resource, flexibility and economies".
However, the former Watson Wyatt senior partner suggested in his final report "the potential synergy from a merger is fairly limited" between the roles of the Pension Protection Fund (PPF), The Pensions Regulator (TPR) and the Financial Services Authority (FSA) so he has therefore recommended the bodies "should not be combined".
Purnell thanked Thornton for "all his hard work" and in an early comment on the report said "we intend to fully implement his proposals".
As the split of the ombudsman offices seem to be "historical, not essential" Thornton thinks "retaining the two separate bodies in their present form does not seem to provide the optimal outcome for effective and efficient management of pensions complaints and disputes".
A spokesperson for the Pensions Ombudsman told IPE the body would not yet comment on the report.
But in the earlier stages of the review which started in January, the industry's reactions to a possible merger of the regulatory bodies and the PPF were fairly mixed but industry experts at that time leaned towards objection.
In a statement issued today, the PPF said the review was a confirmation of the effectiveness of the current system.
Thornton himself pointed out he was "impressed that [the PPF and the TPR] co-ordinate resources effectively" and stressed they "were handling their challenges well, and were carrying out their remits effectively".
Nevertheless, he suggested the government should "institutionalise the effective co-operation" between the two bodies including the appointment of "an additional, shared, non-executive member to sit on both PPF and TPR Boards".
The National Association of Pension Funds (NAPF) particularly welcomed the recommended creation of a formal Pensions Institutions Forum which Thornton recommended be chaired by an independent person.
Its purpose would be to "discuss key current and emerging issues relevant to a number of bodies", adding it could then review the position of the TPR and the PPF in 5-10 years time.
"By establishing a formal Pensions Institutions Forum, the NAPF believes we can avoid some of the overlap that has existed in the past between the regulators, mediators and arbitrators," Nigel Peaple, NAPF director of policy commented.
Thornton also said he wanted to see the the TPR and the FSA working more closely on DC regulation although he notes there are "no deficiencies in the current structure of the pensions regulation".