Former FSA chairman Lord Adair Turner is calling for pension charges to be capped at 0.5 per cent and says the Government needs to commit to a firm timetable to implement the cap.
The Department for Work and Pensions has proposed three possible caps on auto-enrolment charges – 0.75 per cent, 1 per cent or a two-tier “comply or explain” model.
Pensions minister Steve Webb confirmed last month the charge cap would not be implemented until April 2015 at the earliest.
There are concerns the plans have been shelved until after the May 2015 general election because the reform is “too complicated”.
Labour is proposing a 0.75 per cent cap with a 0.5 per cent cap imposed as part of quality standards on stranded pots.
Speaking during the Pensions Bill report stage in the House of Lords last week, Lord Turner, who chaired the Pensions Commission, said that the current cap proposals are too high.
He said: “I strongly believe we should make a clear commitment, by a clear date, to get on with this and have a charge cap in place, and that 0.5 per cent is the appropriate figure.”
DWP minister Lord Freud said the Government had given a “strong steer” the cap would be in place by 2015.
Last week, the Government said it would force fund managers to publish transaction costs.
At the Lords debate, former chancellor Lord Nigel Lawson called for all costs to be disclosed.