Defined contribution (DC) pension schemes should disclose their charges on a publicly available register, breaking them down by areas such as administration and compliance, the Pensions Board has been told as part of a consultation on the area.
Suggestions made to the board also included introducing a “standard means” of disclosing costs so that direct comparisons could be made across the industry. The board was urged to work with the Central Bank to ensure consistency in the reporting of charges from pensions provider to trustee.
'Vision' for future regulation
The board went out to public consultation last summer after it drew up a "vision" for the future regulation of DC pension schemes (which pay out according to investment performance rather than final salary).
The board yesterday published its synopsis of the submissions made.
Investment strategies offered to DC pension-holders as a default should be detailed in plain language and backed up by graphics and practical examples, according to other submissions to the regulator. A simple leaflet setting out different categories of investment choice and other details to be considered by members could be produced, the board was told, with some respondents suggesting that the 75 per cent-plus bias towards equities seen in many Irish funds should be changed to 50/50 bonds/equities.
The role of trustees was considered too, with the board asking whether self-certification of a trustee’s competency might be useful and some respondents expressing scepticism about whether this prove a “box-ticking” exercise. Self-certification could be policed through random audits, or via “kite marks”, it was suggested.
The board reported a “high level of support” for a code of governance for trustees that it could issue, although some respondents wondered what the consequences of noncompliance would be.