Politicians on both sides of the house have cautiously backed the industry code of conduct on charges as a first step to improving transparency.
The code, published today, scales back on a previous commitment to expressing charges in "pounds and pence", but demands all providers and advisers list their charges in a standard template for employers setting up schemes for auto-enrolment.
Pensions minister Steve Webb (pictured) said the code was a "useful starting point" as auto-enrolment is rolled out, but argued the government would take action if there is insufficient progress.
He said: "We welcome today's announcement on the introduction of a joint industry code of conduct on making pensions charges clear to employers - it's a useful starting point in improving transparency across the industry as automatic enrolment is rolled out.
"We are looking to the whole of the industry to do the right thing and work together on this and other industry initiatives to improve transparency."
Webb added: "We hope to see the code's widespread adoption and for individuals to be enrolled into schemes with value for money and transparent charges. However, we are prepared to consider taking action more broadly on charges if insufficient progress is made."
Shadow pensions minister Gregg McClymont, who has previously called for the code to be binding, said it was a "significant step forward".
He said: "The industry has listened to what Ed Miliband and I have been saying on transparency of costs and charges. The revised code represents a significant step forward - albeit with room for further improvement.
"But there is a long way to go on reform of occupational pensions and we want to see critical developments, including on scale and governance to ensure that people get pensions they can trust."
But McClymont said Labour was concerned over the graphic used to illustrate the impact of charges on pension pots to employers as it does not allow the user to see the impact of different levels of cost.
While the shadow pensions minister welcomed the inclusion of average transaction costs incurred by the fund, he said the code did not provide for a single overall figure including stock-lending fees or interest on cash balances.
He said when a fund invests in another fund, the transaction costs of the latter are also not included in the disclosed figures.
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