Commenting on publication of the command paper, “Better workplace pensions: Putting savers’ interests First”, and following yesterday’s speech delivered by Steve Webb at the NAPF conference, Lydia Fearn, Head of DC Investment Consulting at Barclays Corporate & Employer Solutions:
“We are reading the details of the new pension proposals in full, but are encouraged by a number of the suggestions made including a greater scrutiny on transaction costs. We believe that a clear and comparable charging structure is the fairest framework for members and providers alike, driving competition and quality in the market, and we support any initiative for increased transparency in the industry.
"However, we are more cautious about any further downward pressure on the charges cap on default funds as focus will shift to achieving the lowest cost as opposed to the best outcome for members. To maintain the balance of value for money against product choice and innovation, the legislation should aim to ensure that a full and competitive marketplace is allowed to grow.
“For those thinking about retiring in or shortly after April 2015, the tight timescales and a lack of detail to date for individuals and employers means there may not be enough time for this group to plan sufficiently. That being said, it is important to help this group understand their options based on the information available, before they make a decision about how they want to turn their retirement savings into an income.
“We work extensively with companies assisting them with the design of their pension arrangements, and have seen first-hand the importance of engaging and informing members over the new reforms. While it is important to ensure the market operates within an appropriate cost framework, the industry must not overlook the role of encouraging individuals to increase their contributions and to contribute as early as possible.”
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