Responding to today’s report by the Independent Project Board (IPB) following the audit of charges in older defined contribution workplace pension schemes, Huw Evans, Director of Policy and Deputy Director General, Association of British Insurers, said:
“This is an important audit which pension providers have worked hard to make happen. The report provides the analysis so the new Independent Governance Committees can ensure pension savers can always benefit from good value schemes in the workplace.
“The Independent Project Board is right to recognise that no single charging structure provides the best value for all customers in all circumstances. How much people save and for how long can have an important impact on charge levels, and investment performance and quality of scheme governance also matter.
“Providers will welcome the clarity this report provides and will remain absolutely committed to building on the radical changes of the last decade which have already seen average pension charges fall to their lowest-ever levels for auto-enrolment schemes. This report will help providers do more to identify and tackle those workers who could be impacted by higher charges and ensure the right outcomes for them”.
The audit covered all pre-2001 defined contribution workplace pension schemes administered by ABI members, those schemes set up after 2001 with charges higher than the equivalent of 1% annual management charge and post 2001 schemes with multiple charging structures. It followed from the Office of Fair Trading 2013 study of the workplace pensions market, following which the ABI and its members agreed to undertake an audit of these schemes overseen by an Independent Project Board.
The IPB’s recommendations require providers to conduct further scheme-specific analysis and identify, by 30 June 2015, what steps could be taken to improve outcomes for savers. The independent governance bodies will evaluate what actions best meet the needs of savers and make recommendations to providers by 31 December 2015, by which date they should also have agreed an implementation plan.
|
