As Australia’s superannuation industry undergoes its own grilling at the Royal Commission, the UK Government has announced the Commons Select Committee will hold an inquiry into pension costs and transparency.
The inquiry would examine whether the pensions industry provides sufficient transparency around charges, investment strategy and performance to consumers.
It comes off the back of the Committee’s recent inquiry into pension freedom and choice, which found that some scheme members were being “shamelessly bamboozled” into signing up to unsuitable ongoing adviser fees. The Royal Commission in Australia yesterday focused on the same issue of adviser charges.
The inquiry’s terms of reference specified that it will examine whether enough is being done to ensure individuals:
The Committee said that a rapid rise in enrolment in workplace pension schemes in recent years, combined with a sharp increase in demand for drawdown products spurred by pension freedoms, provided the background to the inquiry.
“These developments have intensified concerns about the effect of investment management charges, transaction, advisory and other intermediation costs, in eroding the value of individuals’ savings,” the Committee said.
“These are part of broader concerns that low levels of customer engagement and understanding, coupled with costly and opaque intermediation, risk leading to poor outcomes for pensioners.”
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.