The report calls on the Government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions. It notes concerns over current gaps in regulation and the potential for further gaps to arise as a result of having three regulators with a role to play.
The report argues that a single regulator is necessary to ensure all members of workplace pension schemes are adequately and consistently protected.
It also highlights deferred-member charges and member-borne consultancy charges have the potential to cause serious consumer detriment. It recommends both are banned by the Government, if significant progress is not made in the very near future by the industry towards ending them.
"It is essential that all members of workplace pension schemes are protected from poor governance, irrespective of the particular scheme they are in," said Dame Anne Begg MP, chair of the committee.
"We do not believe this is always the case under the current regulatory system and evidence from the regulators failed to convince us otherwise."
There are currently three bodies involved in regulating pensions: the Pensions Regulator, the Financial Conduct Authority (FCA) and Prudential Regulation Authority.
"The Government should reassess the case for establishing one body with sole responsibility for regulating workplace pensions," Begg said. "It should be invested with sufficient powers to ensure that all members of workplace schemes are given the level and consistency of protection they need."
The TUC has backed the select committee's call for workplace pension changes. "With millions more people saving into workplace pensions, this report rightly identifies several key changes needed to prevent staff from losing out," TUC general secretary, Frances O'Grady said.
She continued: "The committee is also right to call for a rethink of the regulatory structure. The growth of auto-enrolment and the growing overlap between regulators means a tougher but simpler structure will make it easier for good schemes to comply and harder for poor schemes to slip through the gaps."
"One of the priorities for regulators must be to strengthen governance arrangements in DC pension schemes. We strongly support the committee's call for workplace governance committees in the absence of trustee oversight. Giving members a voice in how their scheme is managed should be a key objective."
