The Association of British Insurers has appointed Carol Sergeant to oversee an audit of high cost and legacy defined contribution workplace pension schemes.
An Office of Fair Trading report on DC workplace pensions, published in September, identified around £30bn in old and high-charging pension schemes which may not be delivering value for money for savers.
In response, the ABI and its members agreed to undertake an audit of these schemes, overseen by and reporting to an independent project board. The audit is scheduled be completed by the end of 2014.
Sergeant, who led a Government review into simplified products, will chair the independent project board, which will be responsible for setting the terms of reference for the audit, scrutinising the results and agreeing what industry-level actions are needed to address schemes not assessed as providing value for money.
Pensions minister Steve Webb says: “The OFT announcement today is a significant next step in the government’s drive to protect consumers from excessive charges. This audit will give us valuable insight into the charges imposed by legacy pension schemes.
“The independent chair and board will bring the skills and experience needed to conduct this important task.”
OFT chief executive Clive Maxwell adds: “While we have decided not to refer this market to the Competition Commission at this time, we expect this audit to deliver real value to those with savings in the £30bn or so pre-2001 legacy schemes.
“It is also important, particularly given that automatic enrolment is already under way, that any recommendations from the independent project board are implemented quickly.”
The full composition of the independent project board is as follows:
- Carol Sergeant, independent chair
- Michelle Cracknell, The Pensions Advisory Service
- David Hare, Institute and Faculty of Actuaries
- Bridget Micklem, Department for Work and Pensions
- Nick Poyntz-Wright, Financial Conduct Authority
- Joanne Segars, the National Association of Pension Funds Limited
- Ed Smith, Office of Fair Trading
- Doug Taylor, member of the Financial Services Consumer Panel, the EIOPA occupational pensions stakeholder group and Nest’s Members’ Panel
- Otto Thoresen, Association of British Insurers
- Andrew Warwick-Thompson, The Pensions Regulator