This research measures charging levels and structures in trust and contract based workplace pension schemes, and the costs incurred by pension providers in setting up and running a pension scheme. The research comprised a quantitative survey of 719 trust based schemes, and 514 contract based schemes, along with qualitative research with 10 leading pension providers. Interviews took place between September and November 2011.
This report forms part of a programme of research and analysis to inform and evaluate the workplace pension reforms, which will be introduced from October 2012. The Department published its evaluation strategy in July 2011 and a baseline report was published earlier this year. One of the aims of the evaluation is to monitor charging structures and levels, and this research provides a baseline measure of charges prior to the introduction of the reforms. This report updates our knowledge of charge levels following research carried out in 2009.
Specifically this study looked into: the overall charge paid by members, key factors influencing charge levels, and additional charges, such as for specific fund choices, for transfers in or out of the scheme, and discounts for active members. The report also includes the costs associated with setting up and running a scheme for pension providers. The Department is committed to ensuring charges in workplace pension schemes represent value for money to ensure that scheme members can have trust in their pension savings, and will carefully monitor charges going forward.