The Work and Pensions Committee hears from three prominent figures in the drive to promote cost transparency within the pension investment industry for its inquiry into pension costs and transparency.
Wednesday 5 September 2018, Committee Room 5, Palace of Westminster
- Dr Chris Sier, Former Chair, FCA Institutional Disclosure Working Group
- Andy Agathangelou, Founding Chair, Transparency Task Force
- David Pitt Watson, Visiting Fellow at Cambridge Judge Business School
In the context of rapidly rising participation in workplace defined contribution pension schemes, which place a greater onus on individual savers to consider the charges associated with their funds, campaigners have stressed the need for greater transparency to ensure that pension savers - and the trustees and managers tasked with looking after their funds on their behalf – have the fullest possible understanding on what they are being charged and why. The Committee will discuss the efforts made by the industry, Government and regulators to boost transparency and what more needs to be done.
Pension costs and transparency inquiry: wider context
Recent years have seen a rapid rise in enrolment in workplace pension schemes, creating millions of new pension savers in defined contribution schemes. Alongside this, pension freedoms have spurred a sharp increase in demand for drawdown products.
There has been a surge in transfers out of defined benefit schemes as the pension “promise” they offer becomes less certain and sustainable, principally into self-invested personal pensions (SIPPs), which have become the subject of some concern over transparency and the appropriateness of the destination investment.
The Committee’s previous inquiry in pension freedoms heard evidence that set against this backdrop, the low levels of customer engagement and understanding coupled with costly and opaque intermediation risk eroding the value of individuals’ savings and leading to poor outcomes for pensioners.
It was reported in July that the Secretary of State for Work and Pensions might be considering withdrawing support for a national Pensions Dashboard, intended as a tool for driving transparency and engagement.
In response, representatives of the pension industry, particularly those who were involved in developing the prototype dashboard, have begun lobbying Government to press ahead with a single, unified dashboard that combines industry and state pension information. The Committee is publishing today a letter to the company leading efforts to keep the project on track.