Shake up pensions watchdog, say MPs

The government was yesterday told its pensions watchdog was failing to protect company schemes and a radical overhaul was needed to prevent another Maxwell-style scandal.

The Commons Public Accounts Committee yesterday published a damning report, accusing both the Occupational Pensions Regulatory Authority (Opra) and the Department of Work and Pensions of wasting time on "trivial" breaches of the rules and not doing enough to safeguard scheme members.

Opra was established after the Robert Maxwell affair, in which it was discovered that the late media tycoon had stolen hundreds of millions of pounds from the pension schemes of his various companies. It is supposed to ensure that pensions schemes are run properly. But the committee yesterday said it could not be sure Opra could prevent a similar scandal happening again. Opra was also found to be unclear about its powers and was failing to check the suitability of trustees.

"It is worrying that Opra has done so little to monitor scheme trustees, the first line of protection for pension scheme members, and cannot be sure of preventing another Maxwell case," said Edward Leigh, chairman of the committee. He said both Opra and the DWP needed to be more proactive and target higher-risk schemes rather than waste resources on minor breaches. The committee's report found that more than 60 per cent of the 56,000 cases investigated by Opra were for late payment of pension contributions, but over half of these were only 10 days late.

Opra yesterday agreed with the committee that its hands had been tied by prescriptive regulation. "The major risk to pension funds is inadequate funding, and Opra has no remit to address that type of risk," a spokeswoman said yesterday. The organisation has to rely on whistleblowing by scheme trustees and their advisers before it can begin an investigation.

The findings reflect similar criticisms levied by the National Audit Office last year. The Government has acknowledged the failings of Opra. Its Green Paper published in December recommends the creation of a "proactive" regulator.