The Association of British Insurers has appointed Carol Sergeant to oversee an audit of high cost and legacy defined contribution workplace pension schemes.
In September, an Office of Fair Trading report on DC workplace pensions, identified around £30bn in old and high-charging pension schemes.
In response, the ABI and its members agreed to undertake an audit of these schemes, overseen by and reporting to an independent project board. The audit is scheduled be completed by the end of the year.
Sergeant, who led a Government review into simplified products, will chair the independent project board. The board will set the audit’s terms of reference, scrutinize the results and agree what industry-level actions are needed to tackle schemes which do not provide value for money.
Pensions minister Steve Webb says: “This audit will give us valuable insight into the charges imposed by legacy pension schemes.”
Evolve Financial Planning director James Norton says: “The issue with legacy schemes is exit penalties which leave a lot of people snookered. Some of this is blatant profiteering by providers and something needs to be done to stop it.”
The project board also includes representatives from the Department for Work and Pensions, the FCA, The Pensions Regulator, The Pensions Advisory Service and the pensions industry.