In his final speech as NAPF Chairman on Wednesday, Mark Hyde Harrison said that it was time to stop talking about a single regulator for pensions and simply get on with making it happen.
Mr Hyde Harrison said that, with millions of workers being automatically enrolled into a workplace pension scheme and the inevitable increase in scrutiny of the quality of those schemes, regulation was a serious flaw in the current system.
Speaking at the NAPF’s Annual Conference & Exhibition in Manchester, Mr Hyde Harrison said:
“The mass DC market brought about by auto-enrolment will mean that the current regulatory split of the market between The Pensions Regulator and the Financial Conduct Authority will become increasingly apparent – and increasingly unsustainable.
“With pensions becoming an employer duty, and with the growth in the numbers in pensions, it can only be a matter of time before we move to a single regulator for pensions. We’ve been saying this for some time – and we’re not alone – but we do need to have this debate quite openly now.
“Any shift won’t be easy – I recognise that. 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.”
The Chairman also announced the launch of the NAPF’s new Stewardship Disclosure Framework to help funds hold their asset managers to account over how well they apply the Stewardship Principles on the fund’s behalf.
Mr Hyde Harrison also urged against any breakdown in the political consensus on pensions that has helped cement the message that “soft compulsion, with employers and employees chipping in, is the right medicine”. He warned that any attempts to “play around with” pensions tax or to suggest that smaller businesses won’t have to auto-enrol at all would be disastrous.
And he had a clear message for the European Commission on the solvency proposals in the new IORP Directive – urging it to stop dealing with the past and focus on the 60 per cent of Europe’s citizens who have no access at all to a workplace pension.
Hugh Nolan, Director at JLT Employee Benefits, reacted to Mark Hyde Harrison's speech by saying:
“The NAPF Chairman’s call for a single pensions regulator is an eminently sensible idea. The rationalisation of the Financial Conduct Authority (FCA) and the Pensions Regulator (tPR) would constitute a step in the right direction towards providing a streamlined pensions regulatory process. Consumers (i.e. pension scheme members) can only gain from the removal of potentially confusing distinctions between different types of pension provision, and a consistent approach from a single regulator could simplify the overly bureaucratic and complex world of occupational pensions.
“The scale and success of the government’s programme means that the arbitrary division of duties between tPR and the FCA is no longer practicable. At a time when getting people to save more is imperative, anything which creates a simpler pensions environment should be welcomed.”
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