Lord McFall of Alcluith – 2014 Parliamentary Question to the Department for Work and Pensions

The below Parliamentary question was asked by Lord McFall of Alcluith on 2015-01-14.

To ask Her Majesty’s Government what steps they are taking to ensure that the charges, fees and commissions paid by consumers in relation to private pensions are transparent.

Lord Freud

The Government is committed to improving the transparency of costs and charges in workplace pension schemes. The Government’s Command Papers ‘Better Workplace Pensions: Further measures for savers’ and ‘Better Workplace Pensions: Putting savers interests first’ published in March and October 2014 set out a range of measures including a cap on charges in default fund arrangements, a ban on inappropriate charges and proposals to introduce minimum governance standards and improve transparency across workplace defined contribution schemes.

The Government has recently consulted on draft legislation which, subject to parliamentary approval, will introduce new requirements on trustees to improve the transparency of costs and charges in occupational schemes from April 2015. Under these new requirements, trustees will be required to annually report on costs and charges for the first time. Similar rules are to be introduced by the Financial Conduct Authority to require the newly formed Independent Governance Committees to report on costs and charges in workplace personal pension schemes.

Later this year we will consult on ways to build on this first phase of enhanced transparency, to meet our duties under the Pensions Act 2014 requiring information about transaction costs to be disclosed to members of workplace pension schemes, and the publication of costs and charges information. The FCA also intends to consult on amending its rules to with a view to introducing equivalent enhanced transparency provisions for workplace personal pension schemes during 2015.