The Work and Pensions Committee is to conduct an inquiry into transparency in the pensions industry, questioning whether individuals are able to understand the cost, performance and value for money of their pension products.
The probe follows on from the committees recent work on freedom and choice and research into transfers as part of the British Steel Pension Scheme inquiry. The latter found members were "shamelessly bamboozled" by the myriad fees and charging structures of financial advisers.
Transparency has been a major focus for regulators in recent years, with the Financial Conduct Authority driving several projects to improve clarity on the costs of saving for retirement.
The MPs will examine whether individuals get value for money, understand what they are being charged and why, understand the impacts of costs on outcomes, and are aware of where money is invested and its performance.
Individuals' ability to make informed decisions based on cost information and get good value from financial advisers will also come under the committee's scrutiny.
Written submissions are invited by September 3 2018, and are asked to address eight questions:
Do higher-cost providers deliver higher performance, or simply eat into clients’ savings?
Is the government doing enough to ensure that workplace pension savers get value for money?
What is the relative importance of empowering consumers or regulating providers?
How can savers be encouraged to engage with their savings?
How important is investment transparency to savers?
If customers are unhappy with their providers’ costs and investment performance/strategy, are there barriers to them going elsewhere?
Are Independent Governance Committees effective in driving value for money?
Do pension customers get value for money from financial advisers?
