The pensions industry has hit back at Work and Pensions Committee claims that it is moving too slowly to shows full transparency on costs.

The committee led by Frank Field MP claims the slow progress made by the industry should be addressed by compelling all pension schemes to show how they are providing value for money.

The Cost Transparency Initiative chair Mel Duffield said this did not reflect progress made so far on this issue.

“We are disappointed that the committee’s report fails to recognise the strong engagement between industry, regulators and government in adopting the work of the Cost Transparency Initiative.

“Just two months after the launch of the templates, the level of detail in the technical queries the Cost Transparency Initiative has been receiving from investment managers demonstrates the already high level of engagement and take-up by industry.”

Duffield said the FCA, TPR and government ministers were all sending very clear messages to the industry about their expectations, which gave her confidence of the success of the Cost Transparency Initiative.

The PLSA struck a more conciliatory tone in its message, agreeing with some of the committee’s points, but it too defended its record on transparency and the effectiveness of the Cost Transparency Initiative.

PLSA director of policy & research Nigel Peaple, said: “We are fully committed to improving the quality of cost transparency across the pension sector.”

He added: “We are encouraged by the industry’s widespread engagement [with the Costs Transparency Initiative]. The templates have been downloaded thousands of times from the website and the PLSA has fielded hundreds of technical queries about implementing the regime.”

Among comments from pension providers there was support for many of the committee’s proposals, but there was caution on the consequences of limiting retirement or investment pathways products to a 0.75 per cent charge.

Hargreaves Lansdown head of policy Tom McPhail, described the charge cap on retirement pathways as superficially attractive, but as limiting to consumer outcomes.

“Drawdown investors have to be protected from investment and financial planning risks whose potential impact on their financial well-being far outweigh the difference of a few basis points in charges,” he said. “They need active management to protect them through fluctuating market conditions and they need good tools and guidance to help them plan their income withdrawal strategies. Get these wrong and no charge cap in the world will protect them.”

For The People’s Pension director of policy Gregg McClymont, a 0.75 per cent charge cap on the investment pathways was a positive move, but he doesn't pathways as a fix for the at-retirement market.

“There is no reason why vanilla decumulation products – like the pathways - should cost more than accumulation products,” he said. “But while the pathways fix issues in the sale of non-advised flexi access drawdown, we don’t see them as a model for fixing the at retirement market.” In this market, he explained, there was a need for further innovation to gain a better understanding of savers’ needs for whole of life proudcts.

Aegon pensions director Steven Cameron, concurred that his firm would not support the Committee’s call for the FCA to cap charges on such funds unless and until there is evidence of poor value.

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