Pension funds will be forced by the government to disclose all hidden costs in defined contribution workplace schemes, pensions minister Steve Webb has revealed
In a written ministerial statement, published this morning, Webb said: 'The government will be introducing new measures to require transparency for transaction charges in pension schemes.'
He said the extra information would enable those running DC schemes to see exactly how much they were paying for asset management services 'to get the best value for scheme members, who will also benefit from greater transparency'.
The amendment to the Pensions Bill 2013 is the latest part of the government's drive to bring greater fairness and value for money to pension costs, Webb added.
'We're taking action to ensure consumers have access to good quality pension schemes so they have the confidence to plan for their futures,' he said.
'A lack of transparency around the true costs of trading can prevent schemes from securing value for money for their members. We will outline further details on our proposals shortly.'
Webb said the amendment would be introduced at the Report Stage of the Bill in the House of Lords this Wednesday.
Shadow pensions minister Gregg McClymont said the government appeared to have backed down following pressure from Labour on transparency.
'But ministers are only implementing half of Labour's reform agenda,' he added because they have postponed the introduction of the cap on pension charges. Webb confirmed in January that the charge cap for DC schemes would be delayed until at least April 2015.
'Ministers are failing to allow savers and employers to get the greatest benefit from the new workplace pensions and the government's headlong retreat on bringing in a pensions cap has left savers at real risk of rip-off charges,' McClymont said.
However, Tom McPhail, head of pensions research at Hargreaves Lansdown, said the government decision to delay introducing a charge cap was sensible.
'This would have been very disruptive at a time when employers are trying to make sure they comply with the complex auto-enrolment legislation,' he said.
'This has left unanswered the question of whether investors are actually getting a good deal, though in the main they are. Improved transparency will help to reassure investors and to drive better market competition.'