A lack of transparency in the pensions sector "simply gives rise to a concern about profiteering, hidden conflicts of interest and a lack of responsibility" according to Doug Taylor, member of the Financial Services Consumer Panel.
Speaking at a Westminster Employment Forum Keynote Seminar this week on priorities for pensions policy in the UK, he said transparency is "better for everyone" because they buyer has more confidence and the seller can have more confidence there is no regret in the future.
He said: "I do believe that the long term sustainability of the pensions sector needs to be tethered on a rock of trust and a lack of transparency undermines trust."
Mr Taylor added if the industry wants to have trust and confidence in pension savings, and to encourage individuals to make more contributions so they have a better lifestyle in retirement, then there has to be trust and confidence, which is emboldened by transparency.
"The lack of awareness and knowledge about costs and charges generally, and the lack of knowledge and the lack of standardisation about costs and charges are a fundamental problem that we have at the moment."
Speaking at the same event, Margaret Snowdon, chairman of the Pensions Administration Standards Association said for her transparency means something being done in an open way without secrets.
"Transparency is about trust. We actually don’t think that pensions is secretive but there are lots of things we don’t share with our clients.
"Most of them are harmless but I think a key test is if we let the client know about this would they make a different decision and I think sometimes we can be quite surprised about what we learn. I think we should ask ourselves that question every day."
Ms Snowdon added some companies do not log complaints if they are dealt with straight away, or if it is not written down or reported.
She also said that the industry knows more than its customers, and tries to keep it that way by using inconsistent and unclear language, which is another form of poor transparency.
Andy Agathangelou, founding chair, Transparency Task Force, which wrote to the chairman of the Work and Pensions select committee calling for an inquiry into the impact of pension product costs on savers in October this year, was also speaking at the Westminister event.
Speaking about the task force's objectives, Mr Agathangelou said: "What we believe is that higher levels of transparency are a pre-requisite of fairer, safer and more efficient markets, than can deliver better outcomes but can also deliver better value for money.
"Furthermore because of the correlation between transparency and trustworthiness we hope that the work we are doing to drive the market to a more transparent state will help to fix the self imposed reputational damage that the sector has suffered for decades."
ruth.gillbe@ft.com
