Lord McFall in pensions broadside
The ICAS Public Interest Member intervenes amid concerns about payout delays and charges to customers following recent pensions reforms.
Lord McFall has strongly criticised aspects of the recently introduced pensions reforms amid claims that some customers are facing delays in accessing their money and others have been hit with excessive charges.
The former chair of the Treasury Select Committee, who has now joined ICAS as a Public Interest Member on Council, has called for an independent commission into the future of the pensions industry.
He was speaking after media reports that some customers have been facing high fees for accessing their money, especially where they have been seeking to make repeat withdrawals.
The Daily Mail, catalogued six issues it said customers have been facing and these also included unwanted advice, and cuts in the value of pension pots after customers were advised to move to different funds.
Wide-ranging reforms to pensions were introduced earlier this year and these included freedom for customers to draw on their pensions earlier as a cash lump sum rather than purchasing an annuity.
Speaking in the House of Lords, Lord McFall, who is also Deputy Chairman of the Banking Standards Board, said there were "rip-offs taking place daily" and action was needed. He said there was evidence of "complexity and inertia" in the new pensions arrangements and it was important for customers to understand what they were being charged.
Work and Pensions Minister Lord Freud said the government was monitoring the situation and would act if there was proof of excessive fees.
Lord McFall told BBC Radio 5 Live: "There are two issues here. There is the issue of the industry being transparent and straight with people. The government can act as a catalyst in that issue but in terms of long term provisions with pensions there is an increasing burden there and there needs to be a long term approach to it. If we were to take it away from that four or five year horizon then there could be an independent commission. So there's a complementary element to it."
Work and Pensions Minister Lord Freud said the government was monitoring the situation.
Speaking in the Lords, he said: "The new Pensions Minister (Ros Altmann) is meeting with the industry and working with them to make sure they do produce the right level of charging and we are able to monitor that with the Financial Conduct Authority to see that we do get appropriate and fair charges."
Huw Evans, Director General of the Association of British Insurers, told the BBC: "The pensions industry absolutely supports these reforms.
"We think they're the right thing to do. It's their (the customers') money , not ours, but we did say back in February that not enough had been done to enable absolutely everything to run smoothly from day one. I'm afraid in a minority of cases that is proving true."