Changes to the pensions market are needed to make sure millions of workers are not sinking cash into schemes that are bad value for money, the Office of Fair Trading (OFT) has said.
The trading watchdog disappointed consumer groups by not to referring the market to the Competition Commission or recommending a cap on charges, instead making a string of recommendations to shake up the sector.
The OFT, which has been examining the £275bn defined contribution (DC) pensions market, said it had agreed a package of reforms with companies and The Pensions Regulator as the auto-enrolment programme expands.
It will gradually see all workers aged between 22 and the state pension age who are not members of a workplace pension being signed up to one under the Government's plans to head off a looming retirement savings crisis.
The OFT said the Government should look into improving transparency of pension schemes to make it easier for employers to choose the best for their workers.
The pensions minister Steve Webb has pledged to act on the findingsIt found that employers "often lacked the capability or the incentive to assess value for money".
The watchdog also called on ministers to look at banning schemes being used for automatic enrolment which ramp up management costs for people when they stop contributing to their pension, perhaps because they have changed jobs.
It identified a risk of savers losing out in two parts of the market - in what it said were "old and high charging contract and bundled trust schemes" and in smaller trust-based schemes because of "low levels of trustee engagement and capability".
The Pensions Regulator, the OFT said, had agreed to take "rapid action" to look at whether the smaller schemes were delivering good value and Government had agreed new enforcement powers to clamp down on them.
The Association of British Insurers was to begin an immediate audit of the old and high-charging schemes, which the OFT said contained around £30bn of savings.
Minister for Pensions Steve Webb said: "This report outlines further important ways to help consumers, and we will act on its recommendations.
"In particular, we need to ensure those already in pension schemes are getting good value for money, and will be actively involved in the audit of pension schemes sold prior to 2001.
"We will consult shortly on minimum scheme standards, including further action on charges."
But consumer groups suggested the report was a disappointment.
Which? executive director Richard Lloyd said: "Unfortunately the Office of Fair Trading's recommendations don't go far enough to prevent billions of pounds of consumers' money from languishing in poor value schemes.
"People need to see a difference today and be confident in the pension scheme that they're automatically enrolled into, so that they're encouraged to save for their retirement.
"The Government must go further and set high-quality minimum standards for all workplace pensions as soon as possible, including a cap on all charges."
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