Defined Contribution  

Regulators to force DC pension schemes to detail charges

They said in the future, pensions dashboards or other similar comparison tools may include costs and charges information, so adopting this standard approach now may help with such future developments.

A second option was to split the current definition of administration charges into two components - fund management and pensions administration. 

While the existing disclosures were aimed at members, this option would help decision makers such as trustees and employers act more effectively to generate value for money for members the regulators said.


The regulators want to allow stakeholders to assess and compare pension scheme value on a consistent basis and members to switch schemes if needed.

They said the intention of the framework was for trustees and independent governance committees to be able to compare their scheme with similar schemes to assess their comparative performance, which should help drive improvements in value through lower costs and charges, improved investment performance and higher standards of services. 

“We will expect schemes to make data on these publicly available. We are seeking views on how to get this framework right, though we also recognise that perfect standardisation is not possible,” it said. 

“We propose that this framework is backward looking rather than focused on projections to drive factual comparison.”

But they warned some older products had features or guarantees - such as guaranteed annuity rates - which could mean that switching to a modern product may not always be in the customer’s best interests.

“Care would be needed to mitigate the risk that customers switch inappropriately and without considering all elements of VFM, including the valuable features and guarantees of some legacy products,” they warned. 

The latest discussion paper builds on the joint pensions strategy published by the FCA and TPR in October 2018, which outlined how the regulators will work together to tackle the issues facing the sector over the next five to ten years. 

At the time, the joint strategy identified the lack of comparable information as a key factor behind the lack of effective competition and value for money in the pensions market.

Sarah Pritchard, executive director for markets at the FCA, said: “Consumers work hard for their pensions savings and it’s important that schemes are really delivering good-value products.

“This issue is a complex one which impacts almost all pension savers so it’s important that we get it right. The proposals will help all those making decisions on behalf of consumers really challenge providers on value and allow better comparisons between products.”

The FCA and TPR are inviting comments on the discussion paper by December 10, 2021 and will publish a feedback statement setting out next steps in 2022.