LONDON (Reuters) - A sizeable minority of workplace pension providers are not doing enough to cut their fees and will be asked to explain their slow progress, Britain’s financial watchdog said on Tuesday.
Most providers have responded well to a call to put plans in place to cut fees and charges on savers’ funds in defined contribution workplace pensions by the end of 2015, the Financial Conduct Authority said in a statement.
The recommendation by the Independent Project Board (IPB) followed a 2013 market study by the Office of Fair Trading which found that 30 billion pounds ($38.12 billion) of savers’ assets were at risk of delivering poor value for money.
While more than 1 million customers now pay lower charges than before, the FCA said progress was still unsatisfactory or unclear for 16 percent of the assets in contract-based schemes, and 15 percent of assets in trust-based schemes.
As a result, the FCA and the Department for Work and Pensions would shortly be contacting those providers to ensure that savers are being treated fairly.
“We have seen good progress towards the goals that the IPB laid out but this is not the end of the story. Firms should continue to work to ensure that value for money is being consistently delivered,” Andrew Bailey Chief Executive at the FCA said.
“There is still more to do so we will be contacting the providers who have not yet taken satisfactory actions to remedy poor value schemes and we expect them to act swiftly to ensure good value for customers.”
($1 = 0.7870 pounds)
Reporting by Carolyn Cohn; editing by Simon Jessop