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.”