Labour condemns 'shocking' state of pension fees

Labour condemns 'shocking' state of pension fees

Labour has called on the government to impose strict disclosure requirements for trust-based pension schemes, mirroring those imposed on asset managers by the Financial Conduct Authority.

Shadow work and pensions secretary Debbie Abrahams described current transparency requirements for pension schemes as "shocking".

While she praised the FCA's clampdown on asset managers, she said more must be done to ensure trust-schemes, which are regulated by The Pensions Regulator rather than the FCA, also provided greater transparency.

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Speaking yesterday (1 February) at a Trades Union Congress pensions conference, Ms Abrahams said: “On costs and charges it is a shocking state of affairs in this country that no one – no one – can find out how much it costs to run a pension fund.

“Yes, we’ve had caps on costs for DC schemes, but not on transaction costs. Without transparency of costs, we don’t know if the caps are too generous.

"I believe firmly in the principle of simplicity. Everyone contributing to a pension scheme should have a set of transparent and understandable rules, and we should have access to transparent data."

While acknowledging the government's commitment to looking at the issue at the end of the year, she said it was "totally unacceptable" that the issue had "yet again ... been kicked into the long grass".

Ms Abrahams said Labour supported the pensions bill imposing strict new rules on master trusts.

In a wide ranging speech, Ms Abrahams touched on a number of the opposition's pension policies. These included a commitment to keeping the triple lock on the state pension in place, and finding a solution to the grievances of the Women Against State Pension Inequality (Waspi) campaign.

On pension freedoms, she said there were "clear benefits" to the freedoms. However, she said it was "a real dereliction of duty" to introduce these changes "with so little notice and consultation".

She said "45 minutes of consultation with Pension Wise" was insufficient "to make sure that everyone is in a position to invest wisely", and ensure they had an adequate income in retirement.  

She said the government's decision to scrap plans for a secondary annuity market showed they were "starting to see sense".