Occupational Pensions

(asked on 12th May 2021) - View Source

Question to the Department for Work and Pensions:

To ask Her Majesty's Government where responsibility lies for the monitoring of pension scheme charges in automatic enrolment workplace schemes.


This question was answered on 24th May 2021

As part of the introduction of automatic enrolment, requirements were put in place, under the Pensions Act 2008, to ensure that workplace pension schemes selected by an employer to meet their obligations satisfy certain quality and governance standards. The Pensions Regulator enforces employer compliance with the Automatic Enrolment duties.

The Government regularly undertakes public consultations on private pensions policy and encourages all interested parties, including scheme members to submit their views.

In 2020, the department undertook a review of the charge cap and accompanying Pensions Charges Survey. The review concluded that the current level of the charge cap remained appropriate at 0.75 per cent of funds under management within the default arrangement, or an equivalent combination charge.

On 24th May, the department launched a public consultation looking at Permitted Charges within DC Pensions. The consultation seeks views on a proposal to move to a universal charging structure within the charge cap to improve member comprehension of charges, and in turn better enable members to compare pension products if they wish. This consultation also confirms our intention to set a de Minimis on the charging of flats fees within the cap. This will help limit the erosion of small pots of £100 or less, where a flat fee is charged.

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