FCA publishes policy statement over pension cost disclosure

The FCA has published a new policy statement on the disclosure of workplace pension costs and charges to scheme members.

The regulator indicated the new statement has set out its response to the feedback it received to a consultation paper on the publishing and disclosing of costs and charges to workplace pension scheme members, and added that it details the final rules and guidance it is introducing following this consultation.

The statement will affect those who are involved in FCA-regulated relevant schemes in the defined contribution (DC) workplace pensions market, which the regulator said includes pension providers and asset managers, the governance bodies of pension schemes, scheme members and their advisers, as well as consumer representative groups.

Hargreaves Lansdown suggested the FCA’s response ‘mirrored the DWP rules where possible,’ to help ensure consistency across the pensions ecosystem.

“Costs and charges have a significant impact on people’s retirement savings,” Hargreaves Lansdown head of policy, Tom McPhail, commented. “It’s not only important this information is disclosed, it also matters how it is disclosed.

“Clear, simple disclosure from a trusted source is vital if people are to engage with the information and have confidence to act on it. The FCA has come up with a proportionate and well-considered response to this challenge, which should satisfy consumer groups and the industry alike.

“They have also recognised it would be counter-productive to swamp investors with illustrations for all funds available; instead they require disclosure for default funds plus a representative sample of other funds. They have also exempted single member schemes such as one-person SIPPs and they have given some lead in time for full compliance.”

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