PS17/20: Transaction cost disclosure in workplace pensions

Open consultation: CP16/30
05/10/2016
Consultation closed
04/01/2017
Policy Statement: PS17/20
20/09/2017
20/09/2017
Rules come into force
03/01/2018

This Policy Statement (PS) sets out rules and guidance to improve the disclosure of transaction costs in workplace Defined Contribution (DC) pensions. It standardises the calculation of the transaction costs incurred by these pension investments.

Show PS17/20 (PDF)

Currently, independent governance committees (IGCs) and trustees are required to request and report on transaction costs as far as they are able. This PS sets out rules placing a matching duty on asset managers to provide full disclosure of these costs, calculated in a standardised way.

We are placing a duty on asset managers to disclose aggregate transaction costs to pension schemes that, directly or indirectly, invest in their funds. We will also require asset managers to provide information about administration charges, and a breakdown of the transaction costs, on request, with the total broken down into categories of identifiable costs, which could include specific costs like taxes and securities lending costs.

Who this applies to

These rules affect those who are involved in the DC workplace pensions market. This includes those who provide services in that market, such as pension providers and asset managers, and governance bodies of pension schemes, such as trustees and IGCs.

This work will indirectly affect all members of workplace pension schemes subject to the new governance requirements, as the governance bodies responsible for overseeing their investments will get more information about transaction costs.

Next steps

The rules come into force on 3 January 2018.

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