TRANSPARENCY in pension fees is the best way to help firms and staff make the best choices on how they save, business groups told MPs yesterday.
And they rejected a cap on charges in the Work and Pensions Select Committee hearing on pensions auto-enrolment.
“There may come a time when a cap on auto-enrolment charges will become necessary, but the average charge is now down to just over 0.5 per cent,” said Neil Carberry from the Confederation of British Industry.
Large companies have had to automatically enrol staff in pension schemes since October, and smaller firms must follow within the next five years.
“We are often dealing with people with a limited degree of sophistication regarding pensions,” said Tim Thomas from manufacturers’ trade association EEF.
“The solution is transparency of charging.”
The pair told the committee that informing employers of the effects of charges and allowing them to make “informed decisions” is crucial for businesses to benefit from the schemes.