The Association of Consulting Actuaries is calling for government departments dealing with pensions to be included in the Thornton Review of pensions institutions.
In its six-page response to the Thornton Review of pension institutions, which includes the Pensions Regulator, the Pension Protection Fund and the Financial Services Authority, the ACA says it hopes the current consultation will be “the first in a series of regular reviews”.
But it says although it agrees with the need for a review of pensions institutions in general terms, it is “not convinced by the arguments for major structural changes proposed in the consultation document”.
Instead, it advocates “closer and earlier communication between pensions institutions and a clearer understanding of their respective responsibilities”, alongside continued monitoring to “ensure the rationale for a multiplicity of bodies responsible for the regulation and protection of pension schemes remains compelling”.
The ACA also recommends the scope of the review be extended – in future reviews if not for the one currently being consulted on - to cover the “effectiveness of government departments with responsibilities for pensions”.
It claims the failure on the part of government departments “to communicate effectively with one another has had a considerable negative effect on the introduction of new legislation”.
The ACA meanwhile argues against any mergers between the various pension bodies, as it says the PPF and TPR have only been in place for a short time and, in particular, warns against TPR being merged into the FSA to ensure a “developing [pensions] expertise is not lost or diluted by a merger with a much larger regulatory body”.
In addition, the organisation warns the implementation of personal accounts in 2012 will “significantly change the landscape of defined contribution (DC) provision”, and suggests it may be necessary to investigate the potential for establishing a separate department within TPR especially for the new scheme.
The ACA warns there is a danger it will be “very difficult” to operate a risk-focused approach in this area, and suggests this part of TPR “will revert to a box-ticking regulator”, which it argues is an “unnecessary type of bureaucracy” which should be avoided.
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