The UK government and the Financial Conduct Authority (FCA) are seeking views from independent governance committees (IGCs) and pension scheme trustees on how they should report the costs and charges involved in managing and investing pension pots.
To improve transparency in workplace pensions, the FCA and the Department for Work and Pensions (DWP) have published a joint call for evidence on the disclosure of transaction cost information for workplace pension schemes.
From April 2015, IGCs and pension scheme trustees will be required to prepare an annual report about their scheme, including information about transaction costs and administration charges.
According to a paper entitled Transaction Costs Disclosure: Improving Transparency in Workplace Pensions, costs should be reported "in a standardised, comparable format".
The review looks at details such as what costs should be included, what charges should be disclosed, who these should be disclosed to, and in what format.
Pensions minister Steve Webb said: "It's so important we understand all the charges that are placed directly and indirectly on pensions - and that pension schemes and trustees can present them to members in a clear and transparent way.
"There is a fear that the dark corners of the investment and pensions industry hold some nasty surprises. We have a duty to throw light for the first time on potential hidden charges - and restore faith and fairness in British pensions."
Christopher Woolard, director of strategy and competition at the FCA, said: "Transaction costs and charges associated with workplace pension schemes have a direct impact on the value of people's pension pots.
"Trustees and IGCs of workplace pension schemes need to have clear and transparent information as part of assessing value for money offered by pension schemes. We want clarity and consistency across the market and that is why we are asking for views on how costs and charges information should be disclosed."
Pensions provider NOW: Pensions' CEO Morten Nilsson said full transparency of costs and charges was "essential".
"Getting to the point where transaction costs can be published in a standardised and comparable format isn't going to be easy but, despite what many in the industry claim, it can be done," he said. "It would have been preferable if this work had been completed sooner to help trustees and IGCs who are expected to gather information from April."
Comments on the call for evidence can be submitted by 4 May 2015.
