Approximately 407,000 savers who joined pension schemes within the last three years could be subject to a charge of over 1% in the future.  Over a quarter of these savers could be exposed to charges of over 2% - 3%.

These were only some of the results contained in the final report of the Independent Project Board’s (IPB) audit of charges and benefits in legacy defined contribution workplace pensions schemes.  The Board was asked to look at legacy schemes at risk of being subject to charges of a certain percentage.  It was also asked to recommend what actions should then be taken by the new Independent Governance Committees and Trustees.

The IPB gave recommendations such as pension scheme holders should review their data to pinpoint any factors that may have justified high charges.  Furthermore, the IPB recommends that the Department for Work and Pensions and the Financial Conduct Authority review industry-wide progress in fixing poor value schemes and is asking that they publish a report by the end of 2016.

HR experts are commending the board on the recently released report explaining that it may not solve any problems, but it is definitely shining light on the issue and exposing these very harsh truths that many people are not fully aware of.