The pensions industry could be putting out misleading information on stakeholder because there are n...
The pensions industry could be putting out misleading information on stakeholder because there are no agreed standards for fund and product performance.
That is the view of Standard & Poor's which believes that the differing origins of stakeholder products mean performance information is not assessed on a uniform basis. It said that because the companies charged funds in a different way prior to April 2001, performance figures would measure products labelled as being run in the same way, differently.
Andy Pettit, global data director at Standard & Poor's, said: 'Because all stakeholder schemes are very similar, constrained by rules on charges and contribution levels, providers will be forced to rely heavily on performance statistics to differentiate their products.'
He added that the crucial issue was to decide what if any performance records prior to April 2002 should be used and how these could be compared to pension products post April 2001.
Pettit pointed out that past performance figures would come from a variety of different charging structures.
He said: 'The pension might be based on a pre-existing fund on which the annual management charge has been reduced to 1% or less. It could be based on an existing pension product on which the terms have been to 1% or less.
'It could be based on an existing pension product on which the terms have been changed to meet the existing stakeholder standard, or it could be a completely new product, but based on investments in existing funds run by one company or a number of funds run by several different companies.'
Barry O'Dwyer, pensions marketing director at Standard Life, said: 'The different bases on which charges are made, can make performance figures look different.'
‘Important to have an anchor’
Lack of innovation for solutions
Some 2,000 consumers affected
Achievements, charity work and other happy snippets