Helen Liddell, Economic Secretary to the Treasury, recently "named and shamed" 41 companies which have failed to compensate 600,000 urgent cases of people wrongly persuaded to leave employers' schemes for personal pensions.
But neither the Treasury nor the Securities and Investments Board have plans to address the further 250,000 who will be worse off after leaving the state earnings-related pension scheme, Serps.
An Eagle Star spokesman said: "The problem lies with flat-rate charges that are eating into funds where people have low earnings or career breaks. People have been made aware that there is a problem but what is their situation? We would rather do something now so that there are no nasty surprises later on."
A SIB investigation in May 1996 said 240,000 people - and perhaps as many as 340,000 - were likely to see their funds eroded by excessive charges.
On contracting out of Serps to a personal pension, the Government pays an earnings-related rebate to the private scheme, which must pass a test saying it will pay equivalent benefits to Serps. Because the average pay of those with a personal pensions is below pounds 10,000 a year, rebates are small - averaging pounds 250 according to the DSS.
When policyholders stop paying in, life office charges, often more than pounds 40 a year, eat up investment growth and erode the funds. Funds may then shrink until they are worth nothing by retirement.
Hardest hit are those with only rebates being paid in. Of 6 million personal pensions sold, more than 3.1 million, many of them held by women and other low wage-earners, have only the rebate going in.
In February, SIB published a follow-up report showing how many of the life offices had taken action to resolve the problem.
While 36 were taking some action, four providers - Century Life, M&G Pensions, London & Manchester and Winterthur Life - claimed they were exempt from the problem and said they planned to take no action. Most gave no timetable for completing their reviews.
Eagle Star found that of 16,000 rebate-only pensions, nearly 1,000 were likely to suffer shrinkage, or more than 6 per cent.
A SIB spokeswoman said the regulator no longer felt it had to keep the situation under review. "We deal with initial sales and this is about ongoing charges. This was never meant to be followed up."
SIB's original estimate of 240,000 - or 4 per cent of the total who contracted out of Serps - was based on the rates of return policyholders could reasonably expect as of last year.