UK - Clarity and accuracy in disclosing the management fees of defined contribution (DC) plans must be improved, according to the National Association of Pension Funds (NAPF), which gained backing for the launch of an industry-wide code of conduct from both union and fund management representatives.

Speaking of the proposals, NAPF chief executive Joanne Segars said it was important that scheme members be told in language they understood how and why certain management fees were being levied on their savings.

The call received the backing of several high-profile industry members, with Jamie Fiveash, director of customer solutions at multi-employer scheme B&CE, saying charges were currently "horrendously complicated and diverse".

"There are no consistent regulations that govern annual management charges (AMCs), which are often quoted as the scheme or sole charge, but can just be the tip of the iceberg in terms of total charges suffered," he said.

Jonathan Lipkin, head of research and pensions at the Investment Management Association, said he was "pleased" by the discussions and that employers needed to be assured of the best possible scheme arrangement for workers.

Union head Brendan Barber, general secretary of the TUC, said it was important to open up the "mysterious world" of charges and that any step towards regulation was a step forward.

The sentiment on fees was echoed by several members of parliament, with one saying fees could form a "real drag" on returns, especially in a low-interest environment.

Speaking at an event hosted by insurer LV= in the House of Commons, Conservative MP Harriet Baldwin said she agreed fees should be "much more transparent".

Baldwin - herself a fund manager at JP Morgan before joining parliament in 2010 - added: "We all know the corrosive impact of fees. The difference between a 1% fee compounded and a 2% fee compounded is very, very significant over the life of a pension.

"Clearly, in an environment where interest rates are so low anyway, we are talking about a real drag in investment returns."

Speaking at the same event as Baldwin, which saw the publication of an LV= survey on the state of retirement in the UK, shadow pensions minister Gregg McClymont said that while the fees charged by the National Employment Savings Trust (NEST) were "competitive" by UK standards, how they compared with Dutch and Danish AMCs would define the "challenges" facing the country.

The Labour MP also echoed recommendations by the Work and Pensions select committee to remove restrictions currently placed on NEST, barring the transfer of assets and annual contributions in excess of £4,200 (€5,260).

McClymont said that, to ensure the success of auto-enrolment reforms, it was important the restrictions be lifted.

He said that while the restrictions had been introduced in the wake of the Turner report, the government at the time had been unsure to what extent the market could compete with NEST.

"Now we have serious competitors," he said, referencing the launch of NOW Pensions and B&CE.

"It is only fair that NEST is able to restore a level playing field vis-à-vis its competitors.

"I support removing the restrictions to give us the best possible opportunity to get auto-enrolment [going]."

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