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OFT pensions report to target legacy scheme charges

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The Office of Fair Trading will this week publish an interim report into the defined contribution pension market focusing on governance issues and legacy scheme charges, Money Marketing understands.

In January, the OFT launched a market study to examine whether DC workplace pension schemes are set up to deliver the best value for money for savers.

The study’s findings will provide the cornerstone for a forthcoming DWP consultation which will include proposals to cap charges on default funds.

Money Marketing understands the OFT will publish interim findings by the end of this week, with the full study due to be completed in August.

A senior source at a large provider says: “Our expectation is the main concerns will include governance of contract and trust-based schemes and legacy charges.

“The big question is why are the OFT coming out early with this? It may be that the DWP is planning to consult on capping charges before Parliamentary recess.”

Another source says the DWP has held talks with industry representatives about the practicalities of introducing a price cap for pensions.

Parliament rises for recess on 18 July. A DWP spokesman would not confirm whether a consultation on capping pension charges will be published before then.

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  1. Looks like a backdoor route to rid GPP schemes of any remaining pre RDR commission. Poor old Life Co.s will never get their money back!

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