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Bowles demands pension payback

February 14, 2011 3:25 PM

Lib Dem Euro MP for SE England, Sharon Bowles MEP, Chair of the European Parliament's Economic and Monetary Affairs Committee, has called on private pension providers who charge exorbitant layered fees to give the money back to pension scheme holders.

Sharon said: "I was asked in an interview recently what keeps me awake at night. The first answer I gave was: 'fund management margins such as in multiple layers of undisclosed fees and its impact on pension returns'.

"This problem, notable in the UK, but also elsewhere, sees asset management costs eating up substantially more of a fund's growth than is received by the investor. Put another way, measured as a loss to the investor, the collective management fees represent a larger fall in value than the worst ever crash on the stock market.

"I have been providing data to the UK Government and the European Commission on this to illustrate the scale of the problem and I am confident that ministers will be looking into suitable alternatives.

"Any competition in this area, especially from countries that at least for pension funds have got a grip on this problem, is welcome. However, I also invite the Commission to actively look at this problem because it is part of the demographic time bomb, and of course also of relevance for economic stability."