Pension schemes to be rated red, amber or green in new plans to improve transparency for savers
dailyrecord.co.ukA new traffic light-style rating system for workplace pension schemes could improve transparency over their performance and ultimately lead to better value for savers, according to the UK Government and regulators.
The plans aim to reduce the number of savers sitting in poor-value pension pots and schemes would be publicly rated red, amber or green, once the framework is finalised.Competitive pressures should help to drive up standards and over time, regulators expect to see less of a gap between worse-performing schemes and the market average.
The Financial Conduct Authority (FCA), the Department for Work and Pensions (DWP) and the Pensions Regulator (TPR) aim to put the joint framework in place for workplace defined contribution (DC) schemes.This would be used by pension providers and those making decisions on behalf of savers to provide greater transparency over how schemes are performing.Under the plans, schemes will be compared on public metrics that demonstrate value - not just costs and charges, but also investment performance, and service quality.Poorly-performing schemes will be required to improve or ultimately protect savers by transferring them to better schemes.
This should lead to better value pensions, without savers themselves having to take action, those behind the plans said.The proposals will also support the FCA’s objectives around growth and competitiveness.
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