We’ve all been there and done it, lost in the middle of nowhere, lowered the window and verbally accosted a native for directions to the destination that we should have been at 15 minutes ago. 

“Take the first right, second left, third exit at the roundabout and then it’s on your left next to the Dog and Duck, opposite the BP Garage”. Delighted with the obtainment of this precious information you thank your rescuer for their assistance and bid them farewell. After the first right you start to panic – did they say it was a right or left next, and was it the first turning or the second? By the time you reach the roundabout you’re back where you started. Not literally, but evidenced by three laps of the circular traffic junction and an emotional mix of anger and embarrassment from the realisation that you have the memory of an eighty-year-old goldfish.    

Sometimes I think that the world of pensions, or rather the great and good that control it, operate in a manner similar to that of our friendly local traffic controller, often placing the average Joe and Josephine in the driver’s seat of a meandering Ford Focus desperately trying to navigate the Spaghetti Junction of pension planning.   

The requirement to explicitly disclose transaction costs for Defined Contribution pension funds within the annual Chair’s Statement is a recent example. Well intentioned, of that there is no doubt, but we need to be more realistic. How many requests do UK trustee boards receive each year for a copy of their annual report & accounts, or just a copy of their Chair’s Statement? Not many I’m sure. Yes, members should be aware of the costs that they are paying to invest in a fund, as well as the impact this will have upon their income in retirement, but do they really need, or want to know, the minutiae of the charging structure of the fund(s) in which they are invested? Are low transaction costs necessarily a good thing? Could they indicate a lack of fluidity and invention on the part of the fund manager? How do they compare against their peers? What impact do they have in pounds and pence? A good example of a little knowledge in the wrong hands being a bad or useless thing - you decide.

At a time when employers, pension providers and trustees are all thinking of ways in which to better engage with their employees, customers and members, the provision of superfluous and esoteric information such as transaction costs can surely only serve to overload, confuse and leave the lay person totally lost. 

Regulators and pension professionals have a duty to direct members to their end destination via the least congested, confusing and turbulent route. If we want to improve levels of member engagement and encourage greater appreciation of proper retirement planning and the value of their employer’s pension offering, then the provision of meaningful information in a clear and concise format is the obvious way forward. Sadly it appears that we have yet to grasp this simple concept.