Eversheds has commented on the publication of a consultation paper by the Department for Work & Pensions (DWP) that sets out proposals to cap the charges levied by default funds under qualifying defined-contribution (DC) schemes.
Responding to the proposals, Francois Barker, head of pensions at Eversheds, said: ‘It is essential that individuals have confidence in pensions and that they get a decent return from their savings. The introduction of a cap on charges levied by default funds under auto-enrolment schemes should go some way to help with this. However, focusing on charges in isolation does not guarantee a good outcome for members.
‘The focus needs to be on scheme quality. Charges are one aspect of this. But it is also essential that schemes have good governance and effective member communications, that they provide suitable investment options and that there is a decent level of contributions going in upfront.’