Advisers and providers have welcomed the decision not to include a simplified summary of charges document based on a median-earning employee in a code of conduct for employers.
In May, the National Association of Pension Funds consulted on a draft code designed to make it easier for companies to compare the charging structures of different pension schemes.
The consultation, developed with the Association of British Insurers and other industry stakeholders, included a controversial proposal to force providers to issue a standard illustration showing the impact of charges on a sample individual earning £27,000 a year who contributes 8 per cent of their salary into a pension over five years.
The plans were attacked by former Standard Life head of pensions policy John Lawson, who suggested advisers and providers already comply with FSA rules which require more accurate charges disclosure than those proposed in the draft code.
The final code, published last week, has two templates for charges disclosure to employers – one for employers who use a financial adviser and one for employers who are dealing with pension providers directly.
In the version for advised employers, the median-earning employee illustration has been replaced with a document which allows the adviser to fill in details of the age, earnings and contribution record of different employees.
The ABI will develop a web tool to allow advisers and employers to produce a pie chart illustrating the impact of the charges for the individual over five years and 20 years. Providers dealing directly with employers will need to refer them to the web tool.
Aegon head of regulatory strategy Steven Cameron says: “There was a concern that using one specimen member could be counter productive because it would be a false basis on which to compare different schemes.
“The new guidance is a definite step forward from the original, particularly when you consider how much information FSA-regulated firms already provide.”
Hargreaves Lansdown head of pensions research Tom McPhail says: “Anything which can help employers get value for money from their pension provider has to be a good thing.”