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<p>It is important that pension savers know the costs and charges they are paying
and the government is committed to making this happen. We want pension scheme members
to have confidence that there are no hidden charges or fees being taken from their
pots.</p><p> </p><p>Since 2015, we have required occupational and personal workplace
pension schemes offering money purchase benefits, including master trust schemes,
to produce an annual statement, which is available to members; which sets out the
level of charges and, as far as they are able, transaction costs applicable to all
funds; and the extent to which these charges and costs represent good value for members.</p><p>
</p><p>It has previously been difficult for schemes to obtain information about the
charges and transaction costs they incur. The Financial Conduct Authority (FCA) consulted
last year on proposals requiring asset managers to disclose this information to trustees
of occupational schemes offering money purchase benefits, and the governance committees
for workplace personal pensions.</p><p> </p><p>The FCA will publish a Policy Statement
later in the year setting out the final rules and guidance to disclose costs in a
standardised format. We then intend to consult on how we can provide information about
these costs and charges to the members of occupational schemes and to publish it.
The FCA will, thereafter, introduce similar provisions for personal workplace pension
schemes members.</p><p> </p><p>The FCA’s Asset Management Market Study indicated that
there are significant issues with the way the investment market works. Savers, trustees,
and scheme sponsors need a transparent, competitive and cost-effective investment
market to provide for their security in later life and to keep their pension provision
affordable. We will be studying the recommendations and proposed remedies closely
to see what else government can do to support the FCA’s vital work in this area, which
could deliver favourable outcomes for pension savers.</p><p> </p><p>To drive competitive
pressure on asset managers the FCA recommended we look at barriers to scheme consolidation.
We know that smaller pension schemes may not be able to negotiate or drive lower prices
within this market, which in turn can lead to better outcomes for savers. Following
a recent Call for Evidence, we are actively considering ways that we can simplify
scheme consolidation and enable pension scheme scale to develop further.</p>
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