The Personal Accounts Delivery Authority (PADA) has been urged by employers, pension providers and industry bodies to keep the charging structure for the personal accounts scheme simple, flexible and well communicated.
However, the industry has failed to reach a consensus on the charging structure that the authority should apply to personal accounts.
An industry wide-consultation into the charging structure, conducted by the PADA, has revealed that some in the industry are in favour of either an annual management charge (AMC) while others support a one off contribution charge followed by AMCs. Respondents were not in favour of a joining fee as this might encourage staff to opt out of personal accounts.
The PADA’s Charging Structure Consultation Response Document, published today, will be used to shape its recommendations to the Department for Work and Pensions with regards to personal accounts in 2012.
Tim Jones, chief executive of the PADA, said: “Although there is no clear consensus about which charging structure would be best, there is agreement about the qualities the charging structure will need to help personal accounts succeed in its ultimate goal – that of achieving adequate retirement options for more people.”