Back then, horror stories emerged of people paying into personal pension plans for 10 years and seeing any returns swallowed up in commissions and charges.
That prompted a new breed of stakeholder pensions with a maximum charge of 1% (of the fund, per year), and a steady fall in the "average" cost of saving into a pension.
But for a large swathe of pension savers in personal or workplace plans, charges have remained opaque and damaging.
Now the Office for Fair Trading (OFT), after consulting with the Department for Work and Pensions and the Pensions Regulator, is at last cracking the whip on pensions at work. But will an industry not known for its transparency and customer care really fall in line?
Pensions Minister Steve Webb has hinted that a new charge cap of 1% is the endgame. While it is not proposing a cap, the OFT records that around 186,000 pension plans have an annual management charge (AMC) above 1%, with some as high as 2.3%. The OFT adds that several whistleblowing insurers had "indicated to us that an AMC of above 1% is higher than an individual may expect to pay if they bought a personal pension product and is therefore arguably difficult to justify".
The OFT said people in plans set up before 2001, when stakeholder pensions arrived, are paying on average 30% more than people in post-2001 plans. Workers who have changed jobs, stopped paying into a scheme and are therefore deferred members, are typically paying a stunning 50% more than continuing members. Webb is targeting this unfairness, calling it a "deferred member penalty". The insurers call it an "active member discount", and £13 billion worth of schemes use them.
Members of some £30bn worth of schemes - one-quarter of the total - are stuck in older, higher-charging schemes through lack of effective competition.
The OFT said: "While competition on charges appears to be applying downward pressure to the AMCs on newer schemes … the lack of comparability of the AMC and the lack of visibility of other charges, costs and expenses levied from a member's pension pot may be preventing competition on overall charges working optimally."
The wake-up has been prompted by auto-enrolment into workplace pensions, which will next month reach all firms employing at least 1000 people and will cover all but the tiniest enterprises by 2018. That in turn has spawned National Employment Savings Trust (Nest), a quango providing a default pension option, funded by a loan from the Government which has to be paid back.
Pensions campaigner Dr Ros Altmann has warned: "A charge cap of 1% would expose just how expensive Nest is. This Government-sponsored scheme charges more than double the 1% cap for many workers, as Nest takes 1.8% out of every worker's contribution and there is then an ongoing annual charge of 0.3%."
According to Nest and the OFT, the "effective" cost of the default scheme is 0.5%. But insurer Aviva calculates that over the first 10 years the real cost is 0.67%, falling to an effective 0.5% (over all contributions) only after 18 years. Legal & General has already given a guarantee that its workplace plans will cost no more than 0.5%. L&G has also backed the move against active member discounts, though Aviva has defended them.
Webb has already moved to ban "consultancy charging", where advisers draw their commissions from members' contributions. But that has heightened concerns that advice on savings options will not be available to most people at work.
Tom McPhail, pensions expert at Hargreaves Lansdown, said "member engagement" is the missing link in current reforms. "A pension scheme which does not encourage good levels of contributions, investment choices and good decision-making when it comes to drawing a retirement income is unlikely to deliver a good pension, irrespective of the charges."