The industry has urged the National Association of Pension Funds to take care when designing its "pounds and pence" charging code to avoid too much focus on low charges.
In May the NAPF proposed a voluntary code of conduct for members, where it said charges for schemes should be presented to consumers against a baseline comparator (PP Online 16 May).
In responses to the consultation, which closed on 4 July, providers condemned the focus on charges.
Mercer UK head of DC Paul Macro said: "In some cases lower charges might lead to better value for money, this is not always the case. There is a lot of evidence that investing in stronger governance can produce better member outcomes."
The Society of Pension Consultants added: "Low charges will not secure a good outcome if combined with one or more of inadequate contribution levels, inadequate investment returns and unsuccessful decumulation.
"Employers could be placed on the defensive if they chose anything but the cheapest option."
RPMI head of technical services Nigel Oakley said: "There is a risk that the code could facilitate a race to the bottom in terms of charges over other considerations."
In this week's Pensions Buzz, we want to know whether you support the ruling that defined benefit (DB) trustees must equalise GMPs in past transfers.
This week’s top stories included the rejection of an automatic guidance amendment in the Pension Schemes Bill, while The Pensions Regulator posted a sharp increase in the use of its powers.
The majority of the pensions industry agrees an eventual net-zero target should not be mandated for schemes as part of the Pension Schemes Bill, according to a Professional Pensions poll.
Local Pension Partnership Administration (LPPA) has become the latest organisation to join the Pension Scams Industry Group (PSIG) forum.
Two-thirds of UK fund managers are reducing investments in companies that fail on diversity and inclusion scores, according to a survey by Edelman.