Pensions - Articles - Charge cap guidance brings uncertainty around property

 Richard Butcher, MD of PTL commented: “DWP’s guidance outlines that property holding and maintenance costs are now added to the list of charges outside of the charge cap. All well and good for those schemes invested in or looking at property investments, but the problem is this guidance has no legal force and flies directly in the face of the regulations. The result – significant uncertainty for trustees of DC schemes on whether they should invest in property.

 “The issue with the confusion this has created is that it could leave many schemes in hot water with their own membership.

 Any member of a DC scheme, aggrieved at paying property holding costs could (a) point to the regulations (i.e. the law) and make a factual complaint of non-compliance and (b) argue that it is unreasonable to treat holding costs as a transaction cost – because they aren’t. It is something that needs to be cleared up as soon as possible or we risk members litigating against their trustees.”