Earlier this week, pensions minister Steve Webb published a written ministerial statement saying that the Government will be introducing new measures to require transparency for transaction charges in pension schemes.
In this amendment to the Pensions Bill 2013, Mr Webb said that the extra information will enable those running defined contribution (DC) schemes to see exactly how much they were paying for asset management services in order ‘to get the best value for scheme members, who will also benefit from greater transparency’.
He added that the amendment to the Bill, which will be introduced at the Report Stage of the Bill in the House of Lords today (February 26) will ensure that consumers have access to good quality pension schemes so they have the confidence to plan for their futures.
According to Mr Webb, a lack of transparency around the true costs of trading can prevent pension schemes from securing value for money for their members.
Shadow pensions minister Gregg McClymont attacked Mr Webb’s stance, saying that the Government is only implementing half of its proposed reform, as ministers have postponed the introduction of the cap on pension charges until at least April next year, leaving savers at real risk of “rip-off charges”.
However, many believe that the Government’s decision to delay introducing a charge cap is sensible, as to do so now would have been very disruptive at a time when employers are trying to make sure they comply with the complex auto-enrolment legislation.
If the amendments to the Bill go through the Lords, the improved transparency on charges will help to reassure investors and to drive better market competition.
Mackrell Turner Garrett Solicitors in London
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