FCA proposes rules for IGCs to disclose costs and charges

The Financial Conduct Authority (FCA) has proposed a set of rules requiring scheme governance bodies to disclose the cost and charges to scheme members on an “ongoing basis”.

In a consultation published today, 28 February, the FCA said it wanted to require contract-based schemes, those in workplace pension schemes regulated by the regulator, to publish its cost and charges.

The FCA said this includes; pension providers and asset managers, independent governance committees and their advisers, scheme members and their advisers and consumer representative groups.

According to the regulator, it is hoping to ensure that scheme members can find costs and charges to ensure “they receive good value for money” and that their pension scheme will “meet their needs for future retirement”.

The FCA said it will be working closely with the Department for Work and Pensions and The Pensions Regulator to design and implement the package of measures.

Commenting on the proposals, Hymans Robertson partner, Rona Train, said: “Today’s consultation from the FCA is an important step forward in levelling the playing field between trust and contract based arrangements.

“Requiring the disclosure of costs and charges for all DC arrangements makes comparisons across products more simple. However, what we really need to see in addition to this is full disclosure of the way bundled charges are made up.”

Furthermore, Train said a number of questions still remained including, how much is attributable to investment fees, platform charges and administration costs? This would be a welcome advancement in the move towards greater transparency?

The consultation closes on 28 May 2019.

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