CLEAR details on fees and charges on pensions, as well as regular, standard updates on costs are vital if public trust is to be rebuilt in the industry, the Association of British Insurers (ABI) said yesterday, calling for a sector-wide agreement on transparency.
Millions of new savers are set to build up pension pots for the first time as auto-enrolment starts, leading the ABI to demand more scrutiny of costs as well as benefits.
Writing to the Financial Services Authority (FSA) and the Pensions Regulator, the ABI said clarity would “help employees to make good decisions,” and said the “costs incurred by pensions schemes in the course of their investment trading” should be disclosed to employees in contract- and trust-based schemes.
The National Association of Pension Funds welcomed the letter, arguing employees “must be able to gauge whether they’re getting a good deal” out of auto-enrolment.
And the Investment Management Association said “trust and confidence are both pre-requisites for a successful retirement savings culture,” which would be boosted by increased transparency.
However, although the ABI is seeking help from the authorities, the FSA insisted such a change of set up is down to the industry alone.
Meanwhile the Pensions Regulator welcomed the letter, saying “action by the industry now, ahead of the main wave of auto-enrolment, is timely and appropriate.”
Automatic enrolment is being phased in from October 2012, and is expected to see an additional 8m workers save for a pension.