The Office of Fair Trading's (OFT) study of the £275bn defined contribution (DC) workplace pensions market has found some schemes offer no value for money.
The trading watchdog, which decided not to refer the market to the Competition Commission or recommend a cap on charges, made a string of recommendations to shake up the sector instead.
The OFT said it had agreed a package of reforms with companies and The Pensions Regulator as the auto-enrolment programme expands.
Workers aged between 22 and the state pension age who are not members of a workplace pension are being signed up to one under the Government's plans to head off a looming retirement savings crisis feared as people live longer but fail to put enough money away for their old age.
As well as examining whether savers were getting value for money, the OFT's investigation also took in the pressure on providers to keep their charges low and looked at the size of pension pot people were likely to end up with at retirement.
The pensions minister Steve Webb has pledged to act on the findings It said that the Government should consult on improving the transparency and comparability of pension schemes to make it easier for employers to choose a scheme for their workers.
The OFT said employers "often lacked the capability or the incentive to assess value for money."
The watchdog also called on ministers to look at preventing schemes being used for automatic enrolment which ramp up management costs for people when they stop contributing to their pension, perhaps because they have changed jobs.
It identified a risk of savers losing out in two parts of the market - in what it said were "old and high charging contract and bundled trust schemes" and in smaller trust-based schemes because of "low levels of trustee engagement and capability."
The Pensions Regulator, the OFT said, had agreed to take "rapid action" to look at whether the smaller schemes were delivering good value and Government had agreed new enforcement powers to clamp down on them.
The Association of British Insurers is to begin an immediate audit of the old and high-charging schemes, which the OFT said contained around £30bn of savings.
Clive Maxwell, OFT chief executive, said: "We have found problems in relying on competition to drive value for money for savers in this market.
"We've therefore worked closely with the Government, regulators and industry to agree a set of measures that we believe are an important step in helping to ensure that savers get better outcomes.
"It is important, particularly given that automatic enrolment is already under way, that these measures are implemented rapidly," he concluded.
Minister for Pensions Steve Webb said: "This report outlines further important ways to help consumers, and we will act on its recommendations.
"In particular, we need to ensure those already in pension schemes are getting good value for money, and will be actively involved in the audit of pension schemes sold prior to 2001.
"We will consult shortly on minimum scheme standards, including further action on charges."
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