Not sure how your pension is doing? Neither is the government
By Cassie Chambers
"Insufficient accountability" makes it impossible to know if the Pensions Regulator is delivering value-for-money, the National Audit Office (NAO) said today.
The agency claimed the lack of an intelligible performance measurement system makes it impossible to know if the Pensions Regulator is protecting members' benefits in defined contribution schemes.
"It is not possible to judge how well the Pensions Regulator is doing to protect the benefits of members of work-based pension schemes," said the head of the NAO, Amyas Morse.
"This is all the more significant as the trend towards membership of such schemes accelerates. While the regulator’s overall approach is sound, its performance measurement system is not strong enough."
Starting in October, employers will be required to automatically enrol employees in pensions, a policy change that is expected to increase membership of such schemes by up to 8 million by the year 2018.
In addition to better performance measurement, the NAO also emphasised the importance of different regulatory bodies coordinating ahead of the October change.
"Responsibilities for regulating pensions are shared, and the agencies involved need to develop a concerted approach to assess and, where necessary, act upon risks," Morse explained.
He suggested the agencies develop an "integrated approach to collecting evidence, assessing risks to members, and measuring the effectiveness of pension regulation".
If regulatory reform fails, the NAO claimed the British public will have to bear the high cost of the system.