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28 Aug 2012

ABI Sets Out Measures To Boost Pensions Transparency

The Association of British Insurers (ABI) last week wrote a letter to The Pensions Regulator and the Financial Conduct Unit of the FSA, listing measures designed to make the pensions industry more transparent.

According to the ABI, pension charges should be disclosed consistently and in a simple manner to employees across contract and trust-based pension schemes. In addition, transaction costs, including broking fees, should be available to employees in all schemes. Clear and relevant information on charges and transaction costs should be presented to employees regularly as their funds accumulate, while existing workplace pension schemes should make sure that clear and comprehensive information on their charges is available to employees, the letter says.

Based on the proposals in the letter, a protocol for the pensions industry should be developed by the end of 2012 to bolster consumer confidence as auto-enrolment is rolled out.

ABI director general Otto Thoresen said that even given the significant decline in charges for contract-based pensions over the past few years, the industry has to ensure that members of all types of defined contribution schemes have access to clear and comprehensive information on charges and costs which will help them in the choices they make.

People need to understand the charges they are paying and believe in the pension schemes they are being auto-enrolled into in order for the industry to see a minimum number of employees opt out of these schemes, Thoresen added.

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