Do workplace pensions offer value for money?
Following the introduction of auto-enrolment, the Office of Fair Trading (OFT) has launched a study on whether workplace pension schemes offer employees value for money.
Auto-enrolment means more people will be saving into workplace pensions. However, as our December 2012 article on auto-enrolment noted, one of the drawbacks for employees is the possibility of being enrolled on a scheme that has high charges, as these fees erode the size of the employee’s pension pot.
The OFT has recognised this issue and decided to examine the value for money offered by workplace pensions and the size of the pension savers will end up with at retirement. Among the issues being investigated by the OFT are:
- whether there is sufficient pressure on pensions providers to keep charges low;
- the extent to which information about charges are made available to users; and
- the barriers to switching between schemes.
The OFT aims to complete the study by August 2013.
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