The National Association of Pensions Funds is calling on the DWP to delay implementing the automatic enrolment charge cap after concerns were raised about the ability of schemes to cope with a raft of Government reforms.
Under proposals set out by the DWP in March, charges for auto-enrolment qualifying schemes will be capped at 0.75 per cent as part of pensions minister Steve Webb’s “full frontal assault” on member-borne fees.
The pensions industry will also need to adapt to radical reforms announced by Chancellor George Osborne during the Budget. Both of these changes are set to come into force in April 2015.
The NAPF says its members are “extremely worried about the sheer volume of changes” due to take place over the next 12 months.
The trade body wants schemes to be given a year from April 2015 “to explain to The Pensions Regulator or the FCA how they are planning to comply with the charge cap”.
NAPF chief executive Joanne Segars says: “The Budget set out some of the most far-reaching reforms to pensions in over ninety years and while much of the detail of these reforms is yet to be confirmed we do know they must all be implemented by April 2015.
“In this context asking schemes to implement the 0.75 per cent charge cap at the same time risks forcing schemes to do too much too quickly.
“Even with the best intentions, this can only jeopardise good outcomes for scheme members and schemes should be given time to put the changes from the Budget in place first.
“We recommend the Government reviews the timetable it has laid out to ensure it allows room for schemes to get this right, not just get this done.”
A DWP spokesman says implementation of the charge cap will not be pushed back.
“Measures to protect savers from high and unfair charges, including the default fund charge cap, will be introduced from 2015,” he says.
“This follows engagement with the pensions industry and other stakeholders throughout last year, and a formal consultation.
“We will respond in due course to our consultation on governance and transparency.”