Imagine a world where everything was priced in much the same way as a pension scheme?
Well I most certainly can, and it’s not pretty. Can you envisage going into Marks and Spencers and trying to buy a sandwich, and then having to ask about 10 different sales assistants how much it costs and even then maybe not getting an answer till you check your change.
Take that scenario and substitute other companies and or services and it’s not hard to see that we wouldn’t get anything done.
So why is it in the second decade of the 21st Century pension fees remain so obscure?
Over the years I have written many, many stories about pension charges, both for trade magazines like this one and the personal finance sections of the national newspapers.
It’s not just pension charges that seem to challenge providers either.
Recently one of my colleagues on Financial Adviser tried to transfer their pension. For months they had to constantly chase up their pension provider to find what was going on. When finally the provider sorted the transfer out my colleague was still left in the dark; despite his furious questioning he was never really given an adequate explanation of why something that seemed so simple took so long. He is by nature a vocifirous questioner and will worry away at something until he gets an answer. So goodness knows what it would be like for someone who perhaps didn’t work in finance or have an understanding employer.
With modern technology bank transfers can take next to no time. Not all pension schemes seem to be equal either in fact when I was enrolled into a public pension scheme - I spent an academic year as a guest lecturer - it took less than four weeks to get my refund.
No wonder then that shadow work and pensions secretary Debbie Abrahams described current transparency requirements for trust-based pension schemes at a Trades Union Congress pension conference as "shocking". In fact I will leave the last words to her: "I believe firmly in the principle of simplicity. Everyone contributing to a pension scheme should have a set of transparent and understandable rules, and we should have access to transparent data."
