Pension schemes will for the first time be compelled to publish the fees they charge their members for investing their pension, under proposals announced by the Department for Work and Pensions (DWP) which it is estimated could benefit up to ten million individuals
Savers will also be able to access information about where their money is invested. Failure to provide this information could cost occupational workplace pension scheme trustees up to £50,000 from April 2018.
David Gauke, secretary of state for work and pensions, said: ‘For too long savers have been in the dark about where their pension is invested, what they are paying for, and why they are paying it.
‘By giving people the tools to better understand their options and compare value for money, I believe we are creating a generation of smarter, more informed savers.’
The government says publication of charge and transaction cost information will enable pension scheme trustees and others to compare the value for money they are receiving with their peers, thereby driving better market outcomes.
Schemes will also be required to publish an illustration of the compounding effect of the costs and charges affecting their pension savings.
The proposals are subject to a consultation which is asking for feedback on the scope of the requirements, which are intended to cover occupational schemes that provide money purchase benefits; even if the scheme does not only provide money purchase benefits, how the information should be presented and how frequently it should be published.
The Financial Conduct Authority (FCA) will consult on corresponding rules for workplace personal pensions in the new year.
The deadline for comments is 6 December
Occupational pensions: improving disclosure of costs, charges and investments is here.
Report by Pat Sweet
