Prudential has reduced charges by an average of 15 per cent across its workplace group personal pensions and where exit charges applied, these have been removed.
The changes were announced on Friday (11 March) in Prudential’s inaugural independent governance committee annual statement.
According to the statement Prudential has gone beyond the scope of the IGC remit to remove all applicable exit charges on trust-based defined contribution schemes.
With regard to investment strategy, the IGC examined a cross-section of default investment strategies and concluded the strategies in place are suitable and capable of delivering the outcome set.
Lawrence Churchill, chairman of Prudential’s independent governance committee, said: “On the face of it, the concept of Value for Money appears straightforward.
“However, once you seek to set it out in writing and take account of what really matters, it quickly breaks down into a long list of criteria and variables.
“In our view what ultimately matters is the outcome for members, and I am pleased with the positive strides we have been able to make with Prudential, particularly in relation to charges, to ensure that members are getting value for money from their workplace pension savings.
“There is of course still further work to be done. Over the course of the coming year the IGC will look at the service and communications received by members, as well as where and how members’ money is invested to see if there is a requirement for Prudential to provide better value for money.”
Earlier this month, Scottish Widows confirmed it will remove all exit fees across its workplace pensions ahead of the introduction of a cap.
It will mean customers will be able to switch to another product or provider without incurring a charge.
Scottish Widows is also in the process of reviewing the exit charges on its individual pensions.
HM Treasury announced plans to cap exit fees in January and the FCA is currently consulting on what level a cap should be.
Daren O’Brien, director at London-based Aurora Financial Solutions, said: “The cynic in me would question why that announcement seems to be just after the Pru ‘helped’ the FCA with their review on closed books.
“However the optimist finds it great that they are reducing their charges and fees to existing clients and not reserving these low charges to just new customers.”
ruth.gillbe@ft.com