The Pensions Regulator says a quarter of defined contribution schemes are unable to judge whether the charges incurred by members represent value for money.
A survey of nearly 600 schemes also reveals just 40 per cent of DC schemes think their overall governance is “very effective”, compared with 65 per cent of defined benefit schemes.
Executive director of DC, governance and administration June Mulroy says levels of governance “tend to be lower” in small DC schemes.
She says: “As we have highlighted previously, levels of governance and understanding tend to be lower in smaller DC schemes.
“Good governance is particularly important given the risks that members carry in DC schemes such as investment performance, value for money and converting their pension pot into an income.”