The government has laid draft regulations before parliament to introduce a 75 basis point charge cap on defined contribution (DC) default funds alongside a raft of additional governance requirements for trustees.
The Department for Work and Pensions (DWP) has also published its response to a consultation on the proposals. This coincides with the Financial Conduct Authority's (FCA) final rules on Independent Governance Committees for contract-based schemes. The DWP said the 75 basis points charge cap would not apply to money purchase schemes with a guarantee, but that trustees' fiduciary duties "should mitigate the risk of schemes using low value promises to evade the cap". According to DWP figures savers could end up with an extra £100,000 in their pensions as a result of a cap on auto-enro...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
