The independent panel convened to probe the defined contribution pensions market has confirmed it will review all workplace pensions sold before 2001 and all post-2001 DC plans sold with fees over 1% per annum.
31 JULY 2014 | BY JUDITH UGWUMADU
The Independent Project Board, established by the Association of British Insurers in February, today published a progress update setting out the scope of its audit its approach. Once this data has been collected, the panel will scrutinise the results and agree what industry-level actions are needed to address those schemes not assessed as value for money. The audit is scheduled to be completed by the end of 2014.
This audit comes as a direct follow up to the Office of Fair Trading’s market study on DC workplace pensions last year. The OFT identified that around £30bn of savings in old (pre-2001) and other high -charging contract and bundles-trust pension schemes that may not be achieving value for money by the standards of modern DC workplace pension schemes.
Project board chair Carol Sergeant said: 'This report provides an update of the IPB's progress to date on the audit of charges and benefits in legacy defined contribution workplace pension schemes. It outlines the approach and methodology being used to undertake the review.
'A final report will be published in December 2014. It will set out the charging structures of in-scope workplace pension schemes as well as showing the impact of these charging structures on different types of schemes members.
'The final report will also include any IPB recommendations for industry-level actions that may be needed to address in-scope schemes assessed as having high charges taking into account any relevant benefits.'
Commenting on the progress report, pensions minister Steve Webb said: 'I welcome the progress made by the audit and I am looking forward to its findings later in the year.
'The OFT identified £30bn of savers' money in pension schemes with charges at risk of being poor value for money. It is right that the Independent Project Board looks closely at these arrangements. It is important that all schemes give savers the confidence that they are acting in their best interest.'
The Competition and Markets Authority said it also welcomed today's progress update from the IPB.