Achieving greater transparency of costs and charges

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • Achieving greater transparency of costs and charges
  • Why is greater transparency required?
  • The legal framework
  • Enabling provisions
  • Disclosure duties
  • FCA duty on asset managers to disclose information about charges
  • Information that is subject to the disclosure duty
  • Templates for cost disclosure
  • Other characteristics of the disclosure duty
  • What if the IGC remains unable to obtain transaction costs?
  • More...

Achieving greater transparency of costs and charges

FORTHCOMING DEVELOPMENT: On 24 May 2021 the DWP opened a consultation on the government’s proposal to move to a single, permitted universal charging structure for use within qualifying DC pension schemes for automatic enrolment. The consultation, which runs until 16 July 2021, also seeks views on the direction the DWP should take in relation to future structure of charges that are permitted in the charge cap.

Furthermore, the DWP is also consulting on the introduction on the previously announced ‘de minimis’ pot size, initially set at £100, below which flat administration fees cannot be charged by the pension provider and which would apply to default funds of schemes used for automatic enrolment. If a member has multiple pots within the same scheme, the ‘de minimis’ would apply across all the pots being charged. The proposals cover the policy around the implementation of the ‘de minimis’ and the draft statutory instrument required to bring about this change which proposes to amend the Occupational Pension (Charges and Governance) Regulations 2015, SI 2015/879.

Commenting on the consultation, the Pensions and Lifetime Savings Association (PLSA) says it supports the DWP’s aims of promoting cost transparency and comparability within pensions, and it is right that these aims are considered alongside other policy interventions to resolve small pots. However, within the
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