The Financial Conduct Authority (FCA) has diluted plans to require pension schemes to provide fee information on all funds offered to workplace pension savers, following industry feedback.

Original proposals required illustrations of the compounded effect of the aggregate costs and charges of each available fund offered to savers, though it has now limited this requirement in favour of "a representative range of funds/options".

In a report published today (4 February) FCA confirmed that, in response to its consultation, Publishing and disclosing costs and charges to workplace pension scheme members, industry experts had raised concerns around the scope, timing, and volume of data that would need to be processed.

Concerns around the implementation process were raised, with industry experts concerned that disclosing a “huge volume of data” could cause implementation issues, as well as inadvertently confuse or “disincentivise members”.

In response, the FCA has confirmed that the introduction of the rules will be phased, with scheme governance bodies only having to report costs and charges in respect to default funds for the first scheme year.

This would then be expanded for subsequent scheme governance years to require information for all investment options available to members.

Chairs' reports will still need to disclose cost information, but this will also be limited to the default options.

Commenting on the report, Aegon pension director, Steven Cameron, said: “While the FCA like the DWP has a duty to require cost and charges disclosure, it is far from clear how many members will take an interest in these new disclosures.

"With this in mind, it seems reasonable to focus first on charges and costs within default funds. We also welcome confirmation that the IGC chair’s report doesn’t need to list costs and charges for every fund which could have led to very lengthy and unwieldy reports.

"For the same reason, we’re pleased that rather than having to disclose the compounding effect of costs and charges for every possible fund option, that a representative range can be provided.

“We remain concerned that there is a risk that some members could misinterpret transaction cost information unless the clear distinctions between these and scheme charges are made clear. Higher transaction costs which lead to better investment returns can be a good thing!”

COBS 19.5 has also been amended to ensure that Independent Governance Committees present information in a way that “considers how members might reasonably use it”.

The scheme governance year has been defined as running from 1 January to 31 December 2020, with costs and charges information for 2020 to be published by 31 July 2021.

Firms will need to comply with the updated requirements from April 2020.

Following its joint regulatory strategy with The Pensions Regulator in 2018, the FCA has now confirmed plans to issue a discussion paper and consultation paper in H1 of 2020, considering how both regulators can help drive value for money for members.

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