The Government rejected Labour calls for an inquiry into hidden charges in pension investments because of the complexity of the issue, pensions minister Steve Webb said today.
Speaking at the LCP DC pensions conference – Deliovering Value to DC Members, Webb said too much transparency around charges would present members with a ‘morass of useless information’ but sidestepped an assertion that even pension advisers were unable to access information on portfolio turnover charges, foreign exchange costs, spreads, stock lending and custody charges.
Challenged as to why there is no mention extra charges such as research paid for outside the AMC through bundled commissions, high foreign exchange rates and stock lending profits, Webb said: “What (Labour pensions shadow) Gregg McClymont said was that there are 200,000 schemes in the land – every one of them should do an annual return to the Pensions Regulator, and we would end up with a complete morass of useless information.
“What we need is news we can use. My view is that transparency is a necessary but not a sufficient condition.
“We need transparency, we need to know what is going on, but in this market it just doesn’t get you there because you are being transparent to the wrong set of people.“
LCP partner Heather Brown said: “Investment managers should be doing more to disclose this information around broker commissions.”