National Audit Office to probe regulator over DC

Audit Office (NAO) has launched an investigation into the Pensions Regulator’s approach to the defined contribution industry.

The report, which will be presented to parliament in the spring, will focus on whether the watchdog takes risks to individual scheme members sufficiently into account.

It will also look into whether the regulator is unnecessarily sharing responsibilities with the Financial Services Authority (FSA).
The move follows the regulator upping its focus on DC towards the end of last year by publishing new guidelines for the industry, focusing on six 'principles for good workplace DC'.

This was a response to a 2010 rap on the knuckles from the NAO, which warned “more needs to be done” in its regulation of the sector.
The review comes as the regulator’s head of DC June Mulroy announced she will leave the organistion next month.

The NAO said: “Defined contribution pension schemes are rapidly gaining in importance for the provision of retirement income to workers in the private sector.
“Any failure to provide effective protection for the benefits of members of these schemes creates risks for individual members, and increases future financial liabilities for the taxpayer if this contributes to people having insufficient funds to finance their retirement.