Pensions - Articles - Governments consultation on permitted charges in DC pensions

The Pensions and Lifetime Savings Association (PLSA) has commented on the Government’s Permitted Charges within Defined Contribution pension schemes consultation.

 Joe Dabrowski, Deputy Director Policy, PLSA, said: “While we welcome the move to the de minimis being set at £100, we believe the issues around small pots need to be considered in a more holistic manner. In the short term, while the de minimis may help with the stock of small pots from being eroded to zero, it will not do anything to prevent the creation of further small pots. It is important to recognise this policy will not markedly arrest the systemic issues faced by savers or schemes.

 “The PLSA supports improved cost transparency and comparability, however we do not believe the proposals to move to a universal charging structure within default funds are an appropriate solution to the problem identified. This move would see a significant overhaul of the functioning of the market to simply improve disclosure. We believe this is a disproportionate solution and other means to achieve the same ends are possible.

 “The consultation floats several ideas which open questions about the wider strategy for the shape and future of the Automatic Enrolment market and what the Government’s intended long term aims are. They are fundamental issues which could have a positive or negative impact on the success of the AE market. Before taking decisions on these far-ranging and complex issues, we urge the Government to undertake an in-depth evidence gathering exercise supported by careful and robust analysis.”

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