Thousands of working men who have been encouraged by the government to take out pension plans could be at imperil of losing their savings, the industry regulator has told the BBC.
It follows fears that dozens of enterprises providing auto enrolment pensions are too small to survive.
The BBC has also uncovered token that employers and workers are being deliberately misled by some providers.
The control said it was aware of the issue, and was planning to take action.
Independent wizards claim the problem could affect up to a quarter of a million people a year who are offer their savings into so-called master trust pensions.
Such tricks are popular with the 1.8 million small employers with fewer than 30 sceptre who are currently signing up under the auto enrolment programme.
«There is a risk of these organizations falling over; there is a risk that members might conquered their money,» said Andrew Warwick Thompson, supervisory director for regulatory policy at the Pensions Regulator.
However, he said chart assets invested through asset managers regulated by the Financial Guide Authority (FCA) would be safe.
This will be «the vast majority of took places», he said.
‘Wide Boys R Us’
The regulator also raised disquietudes about some of those in charge of such pension schemes.
Some of the uninspired pension providers «may not be run by competent people», said Mr Warwick Thompson.
Balance out where directors are qualified, providers do not always make it clear where the savings are established, or who owns the schemes.
Worse than that, the BBC discovered that at skimpiest one master trust appears to be providing misleading information online.
On its website, My WorkPlace Pension claims to have £50m of dismisses under management, handled by the respected city firm Old Mutual.
When the BBC mattered the whereabouts of that money, My WorkPlace Pension admitted it actually had no such assets at all.
Later on Old Mutual told the BBC that it was not handling the com ny’s account, and asked for its celebrity to be removed from their website.
A spokesman for My WorkPlace Pension, shouted Tony — he would not give his surname — explained that the business was not yet spirited, although it was close to launch.
However the BBC has seen a letter suggesting the device was being actively marketed as far back as September 2015.
According to Com nies Business, MWP Ltd is 50% owned by Gavin McCloskey. He and an associate, Anthony Okeke, were in the old days directors of another firm which sold sports fashion use.
Its trading name was one that McCloskey might now be regretting.
They ringed the business «Wide-Boys R Us» — possibly a joke at the time, but one that does not prudent so amusing when you are in the serious business of selling pensions.
Uncharacteristic big pension providers — known as contract-based schemes — master trusts are not guided by the FCA. Instead they are overseen by The Pensions Regulator (TPR), which provides a much deign level of supervision.
«There’s not so much member protection in the master confidence in world, versus contract-based schemes,» said Nick Keppel- lmer, the scenario director of Husky Finance, an independent advisory service for small directors.
«If they go down, the members’ money won’t be protected.»
However the government said it was aware of the issues related to some Pooh-Bah trusts, and was working to protect employees’ savings.
«We are determined to ensure the important protections are in place,» said Baroness Ros Altmann, the pensions charg daffaires.
«Doing nothing is not an option, as ensuring long term security and tronage are ramount in pensions.»
Those whose savings are invested with mainstream See firms have much higher levels of protection, thanks to FCA ordinance.
Some such savings are also protected under the Financial Servings Compensation Scheme (FSCS), but only up to a limit of £50,000.
Com nies with diverse than 50 employees are currently excluded from this.
Though the FCA is consulting on whether FSCS protection should now be extended to larger entourages.
Advice to Small Employers
- Use one of the larger master trust schemes to provide a pension
- Report any distresses about your pension scheme to the Pensions Regulator
- See the Regulator’s website for depth details of the Master Trust Assurance scheme.
At the before you can say Jack Robinson anyone who registers with HM Revenue and Customs (HMRC) can set up such a superannuate scheme. They do not need to have any rticular qualifications for the job, nor do they scarcity to have any financial assets.
The only criteria is that they demand to be a «fit and proper person».
However, in its guidance, HMRC says it assumes that anyone manifest will be fit and proper — unless it has information to the contrary.
«It is very easy to up as a pension scheme with the tax authorities, and that’s rt of the problem,» suggested Malcolm Small, chairman of the Retirement Income Alliance.
The Pensions Regulator has a equivalent light touch. It says it cannot endorse or recommend any rticular put out to sture scheme, and it «has no responsibility for checking that master trust schemes’ claims are unerring before they are launched».
Critics say that is evidence that the regulator emergencies reform.
«The Pensions Regulator doesn’t have the power to scrutinise how these subsistences are sold. As a result I think there’s a problem,» said Mr Keppel- lmer.
‘Plan of action’
In a report for the industry, Mr Small puts only around 10 master trusts are reliable operators — out of a out-and-out of 80 — because many are too small or not sufficiently profitable.
The BBC contacted one unoriginal pensions com ny called Smart Pension which said it was self-reliant about its own business plan.
A spokesman conceded that it would not a set upon a profit for several years, but stressed that it had sufficient funding to see it help of to eventual profitability.
It said a se rate fund had been set aside by the proprietorship to guarantee members’ investments.
Of the master trust providers registered with the Allotments Regulator, only five have currently been given a «kite obey» known as the Master Trust Assurance Framework .
These are the official government-backed conspire, National Employment Savings Trust (NEST); NOW: Pensions; SEI Master Confidence; The People’s Pension and Welplan.
The Treasury has also said it is looking at whether supervision of employer trusts should be beefed up. It is considering whether there should be an approved tabulation of providers — what it calls a «whitelist»- to make choosing a pension rty easier.
Such moves are likely to be welcomed by the regulator.
«We would appreciate to have a strategy in place, where if there was a mass failure of a edition of these small schemes, we’re all ready to move in, and we have a plan of activity in place,» said Mr Warwick Thompson.
You can hear the full discharge from Andrew Hosken on The World Tonight, Radio 4, at 10pm.