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FCA and DWP publish call for evidence on pension charges

The FCA and the Department for Work and Pensions have published a joint call for evidence on the disclosure of transaction costs for workplace pension schemes.

From April, Independent Governance Committees and pension scheme trustees will be required to report annually on the costs and charges involved in managing and investing the pension pots of scheme members.
 
The FCA and DWP are now seeking views on how information about transaction costs should be reported in a standardised, comparable format.

They are asking for evidence on what costs should be included, how costs should be captured, how IGCs and trustees will receive cost information and in what format members should receive the information. 

The FCA has also published a report by Novarca which discusses methods of measuring and disclosing costs and charges.

The report notes that it could cost several million pounds for pension providers to upgrade their systems to provide industrial-scale reporting.

FCA director of strategy and competition Christopher Woolard says: “Trustees and IGCs of workplace pension schemes need to have clear and transparent information as part of assessing value for money offered by pension schemes. We want clarity and consistency across the market and that is why we are asking for views on how costs and charges information should be disclosed.”

Pensions minister Steve Webb says: “Pension savers need to have confidence that their hard-earned money is working for them.



“That is why it’s so important we understand all the charges that are placed directly and indirectly on pensions – and that pension schemes and trustees can present them to members in a clear and transparent way.


“There is a fear that the dark corners of the investment and pensions industry hold some nasty surprises. We have a duty to throw light for the first time on potential hidden charges – and restore faith and fairness in British pensions.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. I think fairness and light could be shone on the Government and FCA as well-
    How much are investors now being charged by advisers to keep the FCA in the manner they have now become accustomed to – let’s include a breakdown of all the costs of the “compliance industry” that has sprung up as a defence against retrospective analysis by the FCA of advice given, mostly in good faith, without guidance on what their “good” looks like at the time of need. Can’t we all see the new pension regime as another one ripe for FCA to target with big press headlines and fines to fill their coffers and justify their existence and monumental cost.
    As far as transparency is concerned – How about Steve Webb producing statistics on how much Brown’s pension raids raised and why he has not insisted they were reversed – or is it OK for a Government to takes it’s cut but not providers and advisers who are at least trying to provide a service ?
    Labour seem lined up to have another bite into the pot to fund another of their policies – unbelievable !
    Headlines like these do not encourage enthusiasm for the general public to trust any one of the four major players, Government, FCA, Providers and Advisers and this will not change until there is a cohesive long term well thought through policy embedded in legislation that gives clear guidance on invested fund sanctity and taxation of funds and Income/Inheritance. What a flagship for Government integrity SERP’s was !
    How can Webb have the gall so long after AE was launched to point the finger of guilt at the pensions industry when he hasn’t got his own house in order.

  2. Advice margins to be squeezed. Tax relief on members contributions to probably be reduced. Tax free cash under threat.

    I think by now both the industry and the savers should have got the hint. Just don’t bother with the infernal things anymore. Find something less intrusive in which to invest.

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