Charges, returns and transparency in DC - What can we learn from other countries?

Which? sponsored the Pension's Policy Institute to produce an international comparison of Defined Contribution (DC) workplace pension schemes. The report explores the levels of disclosed costs and charges in each country in the context of each country’s pensions system, the investment returns achieved and also the transparency and effectiveness of the governance oversight of charging. These are important matters for pension scheme members (consumers) since excessive fees or poor returns can lead to lower living standards in retirement.

Key conclusions that can be drawn from the report include that:

UK pension fund charges are generally towards the lower end of those in the countries studied and the Pension Charge Cap has helped to ensure that, unlike other countries, the UK does not a long tail of high-charging pension schemes.

The UK lags behind the Netherlands in terms of transparency. Data from that country indicates that fee transparency initiatives can be successful and lead to lower charges when industry works closely with regulators.