The FCA has published Policy Statement 17/20:Transaction cost disclosure in workplace pensions (PS17/20). PS17/20 follows on from Consultation Paper 16/30: Transaction cost disclosure in workplace pensions and contains final rules that require firms managing money on behalf of a defined contribution (DC) workplace pension scheme to disclose administration charges and transaction costs to the governance bodies of those schemes using a standard approach.
PS17/20 will primarily be of interest to those involved in the DC workplace pensions market. This includes those who provide services in that market, such as pension providers and asset managers, and the governance bodies of pension schemes, such as trustees and independent governance committees.
The methodology for calculating transaction costs matches that required for products subject to the EU Regulation on packaged retail and insurance-based investment products. The FCA states that this aligns its final rules with the work that firms are already doing and ensures consistency with firms’ European obligations.
In addition, the FCA is working with the Department for Work and Pensions (DWP). DWP is planning to consult on proposals as to how costs and charges relating to occupational pension schemes should be published and disclosed to scheme members. Subject to their final regulations coming into force, the FCA intends to consult in Q2 2018 on its proposals to achieve similar outcomes for workplace personal pension schemes.
The FCA notes that firms need to comply with the requirements from 3 January 2018.
View FCA Policy Statement on transaction costs disclosure in workplace pensions, 20 September 2017