Labour’s manifesto has pledged to end ‘rip-off fees’ in the workplace pensions system, revisiting a policy pushed by former leader Ed Miliband.
The manifesto pledges to “restore confidence in the workplace pension system and put people rather than profit at its centre. Labour will end rip-of hidden fees and charges, and enable the development of large efficient pensions funds, which will mean more cash for scheme members and lower costs for employers”.
In March the Investment Association launched a public consultation on the standardisation of disclosure for charges and transaction costs. The consultation sets out an industry code, which provides a blueprint for the reporting of charges and transaction costs using a consistent approach across the market and in line with regulatory requirements. As well as facilitating provision of data under MiFID II and PRIIPs, the IA says it is intended to be fully compliant with final rules for the UK DC market following FCA CP16/30 and will adapt to the conclusions of the FCA Asset Management Market Study.
KAS Bank UK product manager Stewart Bevan: “Those reading Labour’s vast manifesto could easily miss the pledge to ‘end rip-off hidden fees and charges’ in the workplace pension system, but institutional investment costs are felt by almost everyone in the UK with a workplace pension. While we don’t endorse the rhetoric, greater transparency is good news for all. Currently, the exact level of charges is poorly understood, especially those that are difficult to measure, such as transaction charges. This makes it hard for trustees and members to make an informed choice about the value they are receiving from their investments. I hope that shining a light on this issue which affects us all will be made a priority by parties of all persuasions.”
Hymans Robertson partner Chris Noon says: ““For such a left-leaning manifesto, I’m surprised that they didn’t adopt collective final salary plans – similar to those that operate in the Netherlands. That would have been popular with the Unions and helped the long-term saving crisis.”