The Work and Pensions (W&P) Committee is “unconvinced” the industry can illustrate how they are providing value for money to customers and has called on the government to compel them to do so.

In a strongly worded statement, the committee argued it was “unconvinced” that the pensions industry would voluntarily provide clear and transparent information to pension schemes about the costs and charges of investments.

To combat this, the committee suggested regulators be given the power to compel pension schemes to demonstrate a value for money measure, which could be compared across the sector and is accessible to scheme members.

In the statement, W&P Committee chair Frank Field MP said: “The select committee is calling on the government to shine the searchlights into that part of the financial industry that has settled down to misinforming, mischarging, overcharging and making a fat living off the hard-earned savings of pensioners.

“Ripping off pension savers could be eliminated.”

The committee chair added that enhanced scrutiny of value for money in defined benefit schemes will either justify or avoid the need for the often-difficult decisions being taken about the future of the schemes.

Furthermore, the committee also called for the Financial Conduct Authority (FCA) to explore the creation of a public register of asset managers’ record of compliance with reasonable data requests, as it described asset managers as being “unwilling” to disclose all the explicit and implicit costs attached to each investment.

The W&P Committee revealed that some trustees are making investment decisions without knowing the true scale of the costs they were incurring.

The committee also made recommendations on the charge cap for defined contribution schemes, pension scams, the pension dashboard, tax relief and financial advice.

Commenting on the charge cap, it noted that while average charges lay between 0.38 and 0.54 per cent depending on the scheme type, not all charges are covered by the cap. It called for a review of the charge cap, permitted charging structures and to revisit measures to proactively consolidate smaller pots.

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