UK - The UK Pensions Regulator (TPR) has called for more transparency over management fees and said this could be achieved by changing disclosure regulation.
In a preliminary discussion paper on the future of defined contribution (DC) schemes, TPR also urged the industry to support a pension fund accreditation scheme ahead of next year's rollout of auto-enrolment.
The regulator argued that greater transparency on fees would allow for "key decision-makers" to compare value for money. It said it was an opportunity for the industry to voluntarily agree on a template on which such comparisons could be based.
It added that implementation could involve "changes to the requirements around disclosure of costs and fees".
Addressing both fund managers and schemes directly, TPR said it expected arrangements offered today not to become tomorrow's "problem legacy products".
"We want to see more transparency in the way charges are disclosed, demonstrating value for money in a clear and simple way," the report said.
It added that the delivery of an accreditation process that would provide a "certain world" for both employers and employees was desirable, implying the industry should lead the way on implementation.
While details for the accreditation scheme were still undecided, a spokeswoman for TPR said it would allow employees new to pension schemes to recognise quality arrangements.
"We are going to look at what we think good DC provision looks like and whether the industry could therefore set up a voluntary kite-marking scheme," she said, noting that more would be known in the autumn, once the regulator released its final response.
June Mulroy, executive director for DC, governance and administration, said she was encouraged by the "strong views" voiced during the consultation, as well as by the fact the industry accepted the need for change.
"Without positive action by everyone involved with DC pensions, the current market will not always support members to achieve a good outcome from their savings," she said.
The regulator also said it was considering a more proactive approach to safeguarding scheme assets, with a spokeswoman saying the new approach would allow it to step in before problems arose.
The discussion paper said TPR would look to establish an early warning system to bring potential investment issues to attention quicker than is currently the case.
It concluded: "We will look more closely at the effectiveness of the current whistle-blowing regime, the potential role of a new DC notifiable events regime, the data we can collect at scheme registration and through scheme returns, and how we collect intelligence both internally and from other agencies and organisations."