But though Peter Lilley, the Secretary of State for Social Security, backed the idea of a compensation scheme, he last night made clear that the forthcoming pensions legislation would not give a regulator anything like the prominence envisaged by Goode.
He told the Association of Investment Trust Companies annual dinner in London: 'Security would not be achieved by relying primarily on a central regulator. That would require too heavy- handed an approach. With 100,000 schemes it would be impractical.'
Mr Lilley said that instead the Government would toughen laws on trustees and pension fund advisers. He said it would ensure that they operated 'within a clearer framework of duties and responsibilities, have relevant information and the necessary powers to become strong bastions against abuse'.
'I would envisage any regulator being the last line of defence, not the first - with a compensation scheme as the ultimate safeguard.'
Mr Lilley's views on Goode are in line with those of the National Association of Pension Funds, the body that represents occupational pensions, which he strongly endorsed, saying 'We are not going to risk killing the goose that lays the golden egg of occupational pension schemes'.
He also said he was determined to restore confidence without imposing burdens that made pension schemes too much trouble to run.
Ron Amy, chairman of the NAPF, backed Mr Lilley's assessment of the role of a regulator, with a switch in emphasis towards good governance of individual funds.
He said: 'It is very important that we don't end up with such heavy regulation that people are discouraged from setting up schemes.' The NAPF would like to see a combination of a central regulator without any draconian powers and a 'regime of good governance'.Reuse content