Savers will also be able to access information about where their
money is invested, opening up the possibility of people having
greater choice over where their pension is invested.
Failure to provide this information could cost occupational
workplace pension scheme trustees up to £50,000 from April 2018.
Up to 10 million people could benefit from the move.
This is the next step the government is taking to ensure savers
receive good value for money from their pension, that their
pension will meet their needs for retirement, and that savers are
better able to maximise savings.
Secretary of State for Work and Pensions said:
The government is beginning to address a fundamental imbalance
that exists in the pensions industry.
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.
I want people to have a strong sense of personal ownership over
their pension savings. These proposals do just that and will
open the industry.
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.
Today’s announcement comes on the back of the latest pension charges
survey which shows that 98% of eligible members are at
or below the 0.75% cap introduced by government.
However with the survey also showing a clear lack of transparency
on some costs in pension schemes, the government is proposing
that members receive an annual benefit statement where they can
find the costs and charges for their scheme.
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.
Government will also compel schemes to publish an illustration of
the compounding effect of the costs and charges affecting their
pension savings.
The Financial Conduct Authority (FCA) will consult on
corresponding rules for workplace personal pensions in the new
year.
The consultation is open for 6 weeks.
