The Office of Fair Trading (OFT) has appointed a panel of experts to oversee the audit of high cost and legacy defined contribution (DC) schemes.

The Independent Project Board (IPB), chaired by Carol Sergeant, will scrutinise the results of an audit by the Association of British Insurers (ABI) into DC schemes, and will agree on what industry-level actions are needed to address schemes that are not value for money.

The audit is scheduled to be completed by the end of 2014.

IPB's membership includes senior representative from government, the regulators, consumer enforcement, finance and the OFT, such as Joanne Segars of the National Association of Pension Funds (NAPF), Andrew Warwick-Thompson of The Pensions Regulator (TPR) and Otto Thoresen of ABI.

Last year, the OFT published a report on the DC workplace pensions market and identified that around £30bn of savings in pre 2001 and other high charging contract and bundled-trust pension schemes that may not be achieving value for money by the standards of modern DC workplace pension schemes.

ABI head of savings retirement and social care Yvonne Braun said: "We welcomed the OFT report when it was published and said we would work with the OFT, regulators, the Government and others to take forward the actions outlined in the report.

"It's important that savers have confidence in the pension system and the audit of older and higher-charging pension schemes will establish the facts around the charges and benefits in these schemes. We are pleased that the project board has been announced and look forward to working with them to deliver the clarity which is required."

However the Trades Union Congress (TUC) said it was concerned over the OFT's decision not to refer the DC pensions market to the Competition Commission.

Frances O'Grady, TUC General Secretary said: "The OFT's indictment of the DC pensions market was damning. To then decide that such overwhelming market failure will now be voluntarily cleaned up without a reference to the Competition Commission may well prove to be a triumph of hope over experience."

The ten members of the IPB are:

- Carol Sergeant, Independent Chair
- Michelle Cracknell, The Pensions Advisory Service
- David Hare, Institute and Faculty of Actuaries
- Bridget Micklem, Department for Work and Pensions
- Nick Poyntz-Wright, Financial Conduct Authority
- Joanne Segars, the NAPF
- Ed Smith, OFT
- Doug Taylor, member of the Financial Services Consumer Panel, the EIOPA occupational pensions stakeholder group and NEST's Members' Panel
- Otto Thoresen, ABI
- Andrew Warwick-Thompson, TPR

First published 12.02.2014

monique_simpson@wilmington.co.uk