INCORPORATING PERFORMANCE FEES WITHIN THE CHARGE CAP: PLSA RESPONSE TO DWP CONSULTATION
In March 2021, the Department for Work and Pensions (DWP) released its consultation on introducing a third calculation option just for performance fees to make it less likely that a charge cap breach would be incurred. The DWP has previously identified the interaction of the charge cap and performance fees as one of the barriers for DC schemes being able to invest in illiquid assets. The government believes that by smoothing performance fees over a multi-year period, it will encourage DC schemes to increase their investment in illiquid assets.
The PLSA successfully worked with its members to feed in their views.