Responding to the proposals outlined yesterday by the Government to debate options on capping management fees charged by pension providers, Andy Masters, financial services partner at KPMG, commented:
“Anything that can be done to help improve the transparency and efficiency of pensions products and encourage greater levels of savings participation is a good thing. In this context the debate on potential capping of pension charges is very welcome, provided it is part of a wider discussion around creating pension solutions which have customer value at its core.
“It is not just about low cost and full transparency over charges. Capping the fee at 0.75% would not help the customer whose investment return on their hard earned pot was so low as to have a net loss after inflation. What’s important is the ‘value for money’ delivered to savers – the fee paid, the investment return, other features and benefits all need to be included in the mix. And it goes without saying that workers also need additional support to help them understand how their pension scheme works and to help them make important decisions.
“For the industry fixing the future is also only part of the equation. The value created for customers in existing pensions schemes is also in need of review. For example anything that can be done to help consolidate and rationalise pension products and schemes must be a good thing. The inherent complexity of legacy products, systems, regulation of legacy schemes is a challenge providers cannot resolve own their own and will need both encouragement and help from the regulator.”
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Monica Fiumara, Senior PR Manager, KPMG
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