On the go: The Financial Conduct Authority has announced it will allow pension providers to disclose their charges at a scheme level rather than employer level for this year when data are published under new rules this summer.
In a statement, the FCA said it had discussed with companies and independent governance committee members whether data should be published at the level of the arrangement with each individual employer or at a higher level.
Though the approach of publishing at employer level aligns more closely with the FCA’s aim for the rules, confusion among companies has led the authority to allow them to publish at a scheme level this year.
In June last year, the FCA consulted on rules that set out how they expect IGCs to assess the value for money of workplace personal pension schemes and investment pathway solutions.
They expected IGCs to pick a small number of reasonably comparable schemes or investment pathways, including those that could potentially offer better money for value to conduct their assessments, the report stated.
When selecting schemes, the FCA expected IGCs to also take into account the size and demographics of the membership.
In relation to comparing costs and charges data, they were confident that IGCs would have access to pension scheme data to conduct this comparison once scheme governance bodies begin publishing information on costs and charges on their websites.
As the FCA's consultation paper and policy statement did not specifically state that an employer-level disclosure was expected, and considering the time remaining until disclosures will be needed by IGC, the FCA therefore announced it does not propose taking regulatory action against any company that discloses each set of costs and charges that they levy for this reporting year, or show the distribution of costs and charges by employer arrangement in some other way.
As reported by Pensions Expert in February, the FCA ditched a requirement for workplace pension providers to disclose and illustrate the impact of charges on all of their defined contribution funds, after industry concerns were raised in consultation.
Contract-based schemes would only have to report on costs for the default funds in the first year, with the disclosure of charges being extended to the remaining arrangements in the following years.
The rules announced in a policy statement published in February came into effect from April 2020, with independent governance committees and trustees having to present their first report on default funds by July 31 2021.
