Low cost pension provision does not necessarily equate to low risk, according to Mercer, a firm of pension consultants.
The consultancy acknowledged the need to make fees appropriate and transparent, but warned that the current debate focused too much on the cost to members.
“Whilst important, this fails to give due consideration to the risks members face if their savings are only invested in so-called low-cost funds and also fails to consider after-fees performance,” Mercer said.
Costs for investment strategies that seek to protect members’ savings against economic downturns and market fluctuations may cost more.
Martyn James, principal in Mercer Investments, said: “Putting in place an investment strategy driven by fees alone with minimum continued oversight from trustees and employers is no longer acceptable.”
©2012 Funds Europe
