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Enforce full disclosure of pensions scheme costs, says shadow pensions minister

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In a speech at the National Association of Pension Funds (NAPF) conference in Liverpool yesterday, shadow minister for pensions Gregg McClymont (pictured) told delegates that a Labour government would ensure transparency on all pension schemes.

McClymont also said he believed in the consolidation of small pension pots in favour of fewer, larger-scale schemes, the freeing of the National Employment Savings Trust (NEST) from the constraints surrounding its ability to be competitive, and the promotion of more independent trusteeships.

“Today’s savers cannot know the true price of the pensions they are buying,” he said. “We need to make all the costs and charges clear for employers, savers and trustees.”

He added that while larger businesses are often insulated against charges, due to their ability to negotiate, SMEs would be more at risk when their time comes for auto-enrolment.

“For SMEs, it puts the new workforce pension into jeopardy,” he said. “Steve Webb (pensions minister) claims to be watching pensions charges like a hawk, but I don’t think he can prey on high charges without disclosure,” he continued.

“The Government restricts itself to vague threats [of mandatory disclosure], without explaining how it will make it enforceable.”

McClymont also said the Government should be acting to remove the restrictions placed on NEST (such as the cap on contributions), allowing it to compete on a level playing field.“NEST has a role to play on the scaling-up of the UK pensions industry,” he said.

According to McClymont, smaller pension pots are detrimental to the saver and the UK should be aiming to have more savers and fewer schemes. “Pensions are not a cottage industry,” he said. “We must have fewer schemes with more qualified trustees.”