Pension funds could be subject sanctions like Local Government Pension Schemes (LGPS) are if they fail to supply data requested of them to the scheme, it has been suggested.
Giving evidence in to the Work and Pensions Committee today, 5 September, the Institutional Disclosure Working Group (IDWG) former chair, Chris Sier, said that there should more “repercussions” for funds that refuse to give data.
In July, the Financial Conduct Authority (FCA) group made five key recommendations which suggested the use of five templates to help investors to see “key data” more easily.
Sier said: “The next hurdle is to figure out how to get trustees to ask for the data … and make it truly ubiquitous and make it part of the mantra of running a pensions fund.
“There should be repercussions for those who are asked to give data but don’t give it … it can either be an intervention, an option for the FCA, but more importantly could follow the model of the LGPS in delivering sanctions, it’s about asking the FCA to be robust with individuals that they have never been robust with before.”
According to Sier, over 60 asset managers have signed up to the code of conduct which agrees to give data to a certain standard.
When replying to Committee chair Frank Field’s question about why it’s so hard to get the industry to use a standard definition of English, Sier replied: “It’s in their interest not to.”
He added: “There are only a few reasons to decline [to give data] , if they have something to hide such as mis-representing data in the past, or the second is if they are operationally complex it’s easier to say no … or thirdly there is a reluctance to do because they have never had to do it before.
“The data has been so limited we not only don’t know what the right data is, we don’t know what the correct data fields are.”
As part of its recommendations, the IDWG saidthat a new group should be created by autumn this year, in order to “curate and update” the framework. The FCA said it will be forming the new group over the summer.
Furthermore, IDWG recommended that education of investors on cost disclosure must be improved.
The Committee launched an inquiry into the transparency around pension charges last month, concluding it on Monday 3 September.