The pensions industry has largely welcomed the Government's announcement that any cap on charges will not be introduced before April 2015.
Pensions minister Steve Webb said in a ministerial statement that the Government was "committed" to tackling high charges in workplace pension schemes.
However in light of the concerns raised about the timing of any changes, the Government decided to delay the change to give employers more time to prepare, Webb said.
The National Association of Pension Funds (NAPF) said that it was "delighted" with the Government's "sensible step" not to rush the implementation of any cap on pension scheme charges.
During the four week consultation last November about the issue, the NAPF said that it was concerned about the short timescales and the minimal consideration given by the Government to transitional arrangements for employers that are about to go through, or have already go through, auto-enrolment.
NAPF head of policy Helen Forrest, added: "We also believe that any Government policy on charges should be considered in the context of the value for money provided to scheme members, and not separate from it.
"The NAPF would like the Government to consider and assess the comments it has received in response to the consultation before deciding on any timelines for implementation."
Zurich head of corporate life and pensions UK and international savings Simon Foster said: "While this delay will create uncertainty for both the industry and pension schemes in the short term, it should allow schemes the opportunity to plan ahead. We are pleased to see emphasis on planning a sensible transition for pre-2015 schemes in the Minister's remarks."
The news was also welcomed by Towers Watson senior consultant Will Aitken, but he said that there are things that the Government can do to control charges in the meantime.
Aitken said: "Webb is reported to have given a 'categoric assurance' that ministers will take action on pension charges. However, his statement to Parliament leaves some wriggle room on whether this will be through a cap; it says only that the Government is 'strongly minded' to introduce one."
He said that the time that the Government has bought itself will hopefully be used to "thrash out some of the trickier details", such as reassuring itself that the cost of collecting new information and changes to solvency requirements won't push up those charges that are already low.
The Government should also think about how a cap might distort investment decision when some costs will be counted as 'charges' and some will not, Aitken said.
He added: "The Government can get tough on the causes of high charges before it is ready to get tough on headline charges themselves."
However, managing director of the pension provider Liberty SIPP John Fox, said: "If ever there were an illustration of the power of the big beasts of the pensions industry, this is it.
"Steve Webb has faced frenzied opposition from the industry's lobbying machine ever since he announced his plan to stamp out high fees on auto-enrolment pensions. The lobbyists have now got their way."
Fox added that the problem with conventional pensions is what they actually charge for, as they are so "totally baffling" and "impossible to understand".
"So a cap on pension fees is a good start, but really it's not enough. If the pensions minister really wants to make it easier for people to start saving for retirement, he must force the big beasts to cut back the jungle of confusing charges," Fox said.
First published 24.01.2014
monique_simpson@wilmington.co.uk
