TPR’s policy delivery lead Lisa Leveridge made the comments earlier this week (February 7) during a webinar hosted by the Pension Playpen about the new value for money framework.
The value for money consultation paper, published by the government last week, proposed pension schemes should disclose investment returns over three, five, 10 and 15 years, if available.
This would be similar to the system in Australia, where if a pension scheme is not performing well the operator has to write to members with an update.
Leveridge said this is an approach the UK is considering adapting, but she noted that those involved with the consultation are cautious of giving that information to savers in case they make the wrong decision.
The Department of Work and Pensions defined contribution policy manager, Des Healy, told those on the webinar that at the heart of what the consultation is trying to achieve is a desire to put savers at the centre and ensure they have confidence that pension scheme providers are doing the best for them.
Healy noted that at the moment there is no requirement to make comparisons between schemes in the market, but he said as they grow in scale it will be important that trustees can do that.
Addressing the fact that the consultation paper makes no reference to environmental, social and governance considerations, Healy said the rationale behind this was that they did not want unnecessary duplication.
“There are already reporting requirements on ESG,” Healy said.
“Do we need to replicate them? If people thing we have made a mistake and there is a need for ESG in the consultation then please let us know. From our point of view we don’t want to duplicate requirements that are already out there.”
In relation to the timescale for the delivery of the framework, Healy said he expects that some of the “harder” measures proposed will require primary legislation and cross government agreement.
He noted that there is only a certain parliamentary window before the next election, which will need to take place in 2024, and that he hopes it can be completed in that time.
As part of the proposed value for money framework, pensions schemes will be required to disclose investment performance, net of all costs.