A series of reforms have been recommended by the Office of Fair Trading (OFT) to combat poor value-for-money pension schemes.
Defined contribution schemes are too complex for many people to understand and therefore make the right choices, according to the OFT. Furthermore, many employers lack the will or the ability to assess schemes properly on behalf of their employees.
New powers for the Pensions Regulator could come into force if the government agrees the plans. Recommendations made by the OFT to the government include improvements to be made to the transparency and comparability of different pensions schemes.
A cap on management charges has not been recommended, but OFT chief executive Clive Maxwell said it may be considered in the future.