The Financial Conduct Authority (FCA) and the Department of Work and Pensions (DWP) are focusing on pension scheme transaction costs in a bid to make them more transparent.
The FCA and DWP have released a discussion paper that calls for pension providers to disclose transaction cost information for workplace pension schemes.
From next month, the Independent Governance Committees (IGCs) and pension scheme trustees will be required to report annually on the costs and charges involved in managing and investing of the pension scheme.
This paper is part of wider work by both the FCA and DWP who are seeking views so that transaction costs can be reported in a standardised way.
The paper is looking at which costs should be included in calculating charges and whether other information that may impact on investment return should also be included.
Christopher Woolard, director of strategy and competition at the FCA says the regulator wants “clarity and consistency across the market” about how information about costs and charges should be disclosed.
Pensions minister, Steve Webb, says: “There is a fear that the dark corners of the investment and pensions industry hold some nasty surprises. We have a duty to throw light for the first time on potential hidden charges – and restore faith and fairness in British pensions.”
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