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ARTICLE · 06 JULY 2020

DWP Kicks Off Charge Cap Review

Gowling WLG
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The Department for Work & Pensions has issued a call for evidence to the pensions industry in relation to the charge cap that applies to some defined contribution schemes.

CanadaEmployment and HR

The Department for Work & Pensions has issued a call for evidence to the pensions industry in relation to the charge cap that applies to some defined contribution schemes. The charge cap is an important regulatory tool for ensuring that member-borne administrative costs are fair and reasonable, and trustees of relevant schemes will therefore be interested in giving their views on the various proposals and the 18 specific questions posed by the DWP.

Background

The charge cap was introduced in April 2015 following a 2013 consultation amid concerns of excessive administrative charges for workplace schemes. For clarity, the cap only applies to the default fund of defined contribution schemes used for automatic enrolment. A cap equivalent to 0.75% of funds under management was set, alongside the introduction of a number of other measures including the simplification of permitted charge structures.

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