Press Release - The Pensions Regulator: Progress in
establishing its new regulatory approach
26 October 2007
The Pensions Regulator has been effective in establishing clear
links between its statutory objectives and how it goes about
meeting them, and has made good progress in addressing the problems
left by the Occupational Pensions Regulatory Authority (Opra).
The good progress has been acknowledged by the Pensions
Regulator stakeholders: 78 per cent of whom believe that risks to
private pension scheme members would increase in the Regulator’s
absence.
The National Audit Office and the Public Accounts Committee
reported on Opra in 2002 and found that the Regulator had
inadequate powers, for example in terms of enforcing compliance or
gathering information. 73 per cent of the Pensions Regulator’s
stakeholders consider it now has adequate powers.
The Pensions Regulator was established in 2005 to replace Opra.
It regulates private sector pension schemes, in which some 20
million people invest. The Regulator has successfully set about
addressing a number of Opra’s weaknesses and has developed a
strategy for dealing with the areas of greatest risk.
As such, the initial focus of the Regulator has been on final
salary schemes and substantial progress has been made. The early
evidence indicates that final salary schemes in deficit are
planning to eradicate the deficits over shorter timescales than
previously, and that most schemes are targeting higher levels of
scheme funding.
The Pensions Regulator is now also addressing risks to money
purchase schemes (working with the Financial Services Authority)
which its research shows have lower governance standards than final
salary schemes. This includes raising awareness of its role and
giving greater focus to smaller schemes.
Sir John Bourn, head of the National Audit Office, said
today:
“My report in 2002 into Opra detailed a number of
failings, so to be able to report good progress by its successor in
establishing new regulatory arrangements is very
welcome.
“The Pensions Regulator has successfully put in place a
framework to identify and address the key issues and risks to
private sector final salary pension scheme members. Central to that
has been the strategy of addressing the areas of greatest risk. The
next step for the Regulator is to continue its push to roll out the
same level of regulatory oversight to money purchase schemes as it
has for final salary schemes.”
Notes for Editors
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 850 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 44/07
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