Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps he is taking to ensure (a) low, fair and transparent charges and (b) robust standards in auto-enrolment schemes; and if he will ensure the good governance and fair conversion of pension provision in such schemes into income.

Automatic enrolment will give around 11 million people the opportunity to save into a workplace pension scheme, all of which must meet qualifying criteria and minimum requirements. The Government is committed to ensuring that the schemes into which savers are automatically enrolled are well run and protected from high and unfair charges. In April 2015 we introduced a 0.75% default fund charge cap and placed new governance requirements on trustees and Independent Governance Committees (IGCs) to consider the value for money of the costs and charges faced by scheme members.

We continue to work to improve the transparency of costs and charges. Asset managers will be required to disclose costs to trustees and IGCs, and regulations will require publication of costs and charges. In 2017, we will be reviewing automatic enrolment including the quality requirements for pension schemes and how the certification requirements (which allow employers to use existing pension schemes to meet their automatic enrolment duties) are working. We will ban member-borne commission charges in occupational pension schemes used for automatic enrolment and also review the level of the default fund charge cap.

To support members taking advantage of the pension freedoms we will set a cap on early exit charges at 1% for existing members of occupational pension schemes and a ban on these charges for new members of occupational pension schemes (subject to Parliamentary approval) in October 2017. The Government continues to monitor the pensions landscape and will take action where appropriate to ensure that pension scheme members are treated fairly when they seek to access their pension savings.