New transparency rules will enable pensions trustees to improve outcomes for scheme members

RSM has welcomed the publication today of the Financial Conduct Authority's (FCA) proposed rules requiring firms managing money on behalf of defined contribution (DC) workplace pension schemes to disclose administration charges and transaction costs to trustees.

Under the rules, with effect from 3 January 2018, in response to a request from the governance body of a relevant pension scheme, firms must provide:

  • information about transaction costs calculated according to the ‘slippage cost’ methodology
  • information about administration charges
  • appropriate contextual information

Karen Tasker, head of DC pensions at RSM said:

‘This is a big step forward for transparency. These new rules will, for the first time, enable trustees to properly assess value for their members.

‘Our recent DC governance benchmarking exercise involving 15 large DC schemes highlighted that only one had managed to obtain transaction costs for all the investment funds they held. The majority of other schemes stated they were trying to obtain them. However, the investment managers were unable or unwilling to supply the data until further definition and guidance was released.

‘Trustees will only be able to truly assess value for members when all costs are known and understood. Without this level of transparency they are not in a position to improve outcomes for their members.’ /Ends.