Pensions - Articles - PLSA comment on latest DWP review on pension charge cap

The Pensions and Lifetime Savings Association (PLSA) comments on the DWP Review of the Default Fund Charge Cap and Standardised Cost Disclosure.

 Nigel Peaple, Director Policy and Advocacy, PLSA, said: “We are pleased to see the level and composition of the 0.75% defined contribution pension charge cap retained following DWP’s review. The cap is an important consumer protection, ensuring savers receive better value for money from their pensions, though in practice most DC schemes’ are already offering great value to their members by offering default funds that operate well below the cap.

 “Setting a minimum balance of £100 below which flat administration fees cannot be applied will protect the pension savings of workers with the lowest pension balances but a longer term solution to the small pots issue must be developed. It is important the government continues to consult with the industry on this issue via the Small Pots Working Group as well as on future increases to flat fee balance minimums to deliver a successful automatic enrolment market that works for all savers.

 “We are also pleased to see DWP recognise the success of the Cost Transparency Initiative, the industry standard for investment cost data developed by the Pensions and Lifetime Savings Association (PLSA), the Investment Association (IA) and the Local Government Pension Scheme (LGPS) Advisory Board. There has been widespread take-up among asset owners and we encourage all pension schemes to adopt the standard.”

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