The Work and Pensions Committee (WPC) has launched an inquiry to ask whether the pensions industry provides "sufficient transparency" of charges, strategy and performance to savers.
Launched today (3 August), the select committee, chaired by Frank Field, is seeking evidence on whether savers get value for money, understand what they are being charged and why, and understand the impact of such charges on their retirement outcomes.
It is also examining whether savers can see how their money is invested, and how those investments are performing, if savers are engaged enough to use this information to make informed choices about their pension savings.
The committee is inviting submissions on eight questions until 3 September, and has launched the probe after its previous inquiry into the pension freedoms found problems with information provided to pension scheme members. This was most notably with British Steel workers who it said had been "shamelessly bamboozled" into signing up to unsuitable products with high investment risks.
It also comes amid wider efforts to improve transparency in the pensions industry. Earlier this year, new regulations came into force requiring asset managers to disclose a wide range of costs to clients, while defined contribution scheme trustee are also now mandated to provide this information to members.
Also, the Financial Conduct Authority's Institutional Disclosure Working Group has put together five cost disclosure templates which the watchdog will be publishing for voluntary usage in the autumn.
Transparency Task Force founding chair Andy Agathangelou hoped the WPC's, government's and regulators' combined work create a "comprehenseive understanding" of the issue.
"Given the enormous impact that costs, charges investment strategy and performance have in driving outcomes for pensions savers it is good news that the WPC has decided to open this inquiry," he said. "There is a universal shared interest among policymakers, regulators, ethical product providers, client-centric intermediaries and of course campaigners that pension savers get the best value for money they can; everybody should be supportive of the move.
"It is great that the committee will be harnessing the transformational power of transparency to help give primacy to the best interests of the client; that's exactly how it should be."
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