Assets in closed with-profits funds comprise 20 per cent of the overall WP market, according to the Treasury.
In monetary terms, this equates to around £191bn out of £940bn in with-profits money residing in closed vehicles.
With-profits liabilities in closed funds amount to £84bn out of a market total of £333bn.
In its report on long-term savings, the Treasury says it will extend its programme of targeted supervisory work on the treatment of policyholders in closed funds later this year and expects this work to carry over into 2005.
The Treasury looks set to ignore Lord Penrose's call for total transparency on with-profits disclosure, saying it will allow greater discretion in how with-profits funds are run than demanded by the Penrose report. It believes that the introduction of statements of principles and practices of financial management and the role of the with-profits actuary are sufficient to ensure that policyholders are given sufficient information on how a fund is being run.
A further consultation on disclosure for with-profits funds will be held in the first half of 2005.
This will look at the implementation of key facts documents and standardised summary boxes, which are to be displayed on the marketing material of long-term savings products.
From the end of the year, with-profits providers will also have to provide policyholders with consumer-friendly versions of its PPFMs. These must document whether the provider has complied with its original PPFM obligations.