The Office of Fair Trading (OFT) has ordered a crackdown on pension schemes that offer poor value to millions of savers.
It is recommending a series of reforms, including new powers for the Pensions Regulator.
But it has stopped short of recommending a cap on management charges, for the moment at least.
It says pension schemes containing £40bn worth of savings are, or may be, delivering "poor value for money".
End Quote Clive Maxwell Chief executive, OFTIt may be that a cap [on charges] is the right thing to do"
The complexity of some defined contribution schemes makes it difficult for individuals and employers to make the right choices, the OFT concluded.
Employers "lack the capability or the incentive to assess value for money", it said.
As a result it is advising the government to consider improving the transparency and comparability of different schemes.
Some older schemes set up before 2001 have management charges that can be much higher than those set up later.
Such charges can erode the final value of a pension quite dramatically.
Clive Maxwell, the OFT's chief executive, said he might still consider a cap on management charges in the future.
"We're holding off on that for now," he told the BBC.
"But it may be that a cap is the right thing to do," he added.
However, the government may yet decide to go ahead with a consultation on a cap, after the Pensions Minister, Steve Webb, expressed his support for the idea earlier this week.
He suggested that the Department for Work and Pensions (DWP) might consider a 1% cap on management fees.
High chargesIn the meantime the Pensions Regulator has agreed to assess which smaller pension schemes are not delivering good value.
If the government agrees, the regulator could also be given new enforcement powers.
The Association of British Insurers (ABI), whose members offer pension schemes, has agreed to carry out an audit of the larger schemes, some of which are making big charges.
Pension providers will also have to set up governance committees to help protect savers.
The OFT has also asked the government to consider banning certain schemes being used for its auto-enrolment programme which make high charges when savers stop paying into the schemes.
The government is worried that such excessive costs could discourage people from taking out pensions, when it is trying to persuade people to participate.
Starting last October, workers are gradually being signed up to workplace pensions, unless they deliberately opt out.
Over the next five years, nine million extra people are expected to join so-called "defined contribution" schemes.
Five million people are already saving into such pension schemes, which invest the monthly contributions in stock and bond markets.
Savers' retirement income is dependent on the investment returns made by such schemes, and the charges they levy.
The pension pot that savers end up with is then used to purchase a retirement annuity, which provides an income for the rest of their lives.
The government has said it will now go ahead with some of the consultations recommended by the OFT.
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