The UK government will consider a ban on secret pension fees in light of a proposition from Lord Mike German to improve the transparency of pension investments.
More from the Financial Times:
The UK government is to debate a ban on non-disclosure agreements that conceal fees between pension funds and asset managers, in a bid to provide individuals with more information about how their pensions are managed.
A proposed amendment to the Pension Schemes Bill put forward by Lord Mike German, former leader of the Welsh Liberal Democrats, would put an end to pension schemes signing non-disclosure agreements with fund companies over fees.
Lord German’s proposal, which has the backing of investor rights charity ShareAction, would also require pension funds to inform savers on request about how they voted at company meetings on issues such as executive pay, and explain how they select and monitor fund managers.
Lord German said: “The purpose of this amendment is to try and establish whether the government is prepared to give people the rights that they need. [Savers] are not disinterested in their pensions.”
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Lord German’s amendment was submitted to parliament in mid-December and will need approval from DWP ministers, the Treasury and the Department for Business, Innovation and Skills. If the amendment is adopted it could enter law by the end of March, according to Lord German.
Currently, pension schemes are only required to disclose information about investment policy and performance in annual reports. ShareAction said that in practice “savers are often sent information that is technical [and] inaccessible”.
Asset managers have already voiced their displeasure with the proposition. BlackRock told the Financial Times: it is “neither in the interest of institutional investors nor of investment managers to ban non-disclosure agreements”.