It would be easy to counter this with a list of a hundred reasons why a code is both workable and necessary. But we’ll stick to the main points.
Charges are a worry for employers and consumers, and are a big reason why people are turning their backs on pensions. Saying that it’s all too difficult to explain will not make that issue go away.
Auto-enrolment will bring millions of savers into pensions, and many, many employers will face pensions for the first time. People want to know about charges. Indeed, A DWP study found that employers expect to research and compare pensions to find the best deal.
John says providers can ignore a code, and that employers simply don’t need to know about charges. We disagree and, what’s more, comments like this lay the industry wide open to criticism about transparency and fairness which a code could help dispel.
Where we do agree is that it is difficult to find a common currency to compare charges. But things are at an early stage and that’s why the consultation is asking for industry input.
At least it’s encouraging to see John go on to say he would like to see a single, user-friendly illustration of charges. It’s one of the code’s key features.
Finally, the work around the code does not belong to the NAPF. Fourteen organisations are on the working group, including insurers, industry bodies and potential customers.
It is difficult, and there are some highly technical issues which need to be resolved over the coming weeks and months. The code will be successful if we as a pensions industry want it to be.