UK - The pensions industry has failed to agree on the best charging structure for Personal Accounts, the results of a consultation into the issue have revealed.
While there was no clear consensus view on the most appropriate charging structure for personal accounts, the majority of respondents were in favour of either an annual management charge-only structure; or a contribution charge with an AMC.
Respondents in favour of an AMC-only structure saw it as simple and transparent, which they felt would encourage participation in the scheme.
Respondents in favour of a contribution charge with an AMC argued that it would be the most sustainable option, with the flexibility to deal with a range of business risks.
Paul Myners, chairman, PADA, said: "The responses to this consultation show there is no easy answer. What is clear is that the charging structure will be a key design decision for the scheme.
"The choice of charging structure will have a direct effect on member outcomes. It will affect the viability and sustainability of the scheme and it may have an impact on participation in the scheme."
The authority intends to advise the Secretary of State for Work and Pensions on a potential approach for the charging structure for personal accounts before the start of the procurement process.
The consultation also asked whether additional charges should be made for particular activities, to keep the costs of the scheme down.
PADA said this was generally supported by respondents; who urged the authority to keep the scheme simple to limit the need for such charges and to ensure any additional charges were clearly communicated to members.
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...