We are consulting on proposed changes to our rules which will be necessary following a proposed amendment to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO) that will make advising on the conversion or transfer of safeguarded pension benefits into flexible benefits a regulated activity.
We are also consulting on related changes to our Conduct of Business Sourcebook (COBS) rules to require that all pension transfers advice be provided or checked by a Pension Transfer Specialist, regardless of when the transferred benefits are being accessed.
Why are we consulting on this?
Our proposals are designed to support the Government’s new flexible pensions regime.
The FCA already regulates advice on transfers to personal pensions. The new regime will bring advice on transfers from defined benefit (DB) schemes to occupational defined contribution (DC) occupational schemes into the FCA’s remit.
The new regime will also make advising on pension transfers significantly more complex, so we now wish to require the Pension Transfer Specialist qualification for advice on all transfers from DB schemes to DC arrangements, regardless of when the transferred benefits are being accessed.
We propose to:
- amend our rules to incorporate the new specified activity of advising on conversions or transfers of safeguarded benefits to flexible benefits, and
- require that all advice on DB to DC pension transfers be provided or checked by a Pension Transfer Specialist
Who does this affect?
This consultation will be of interest to financial advisory firms advising on pension transfers and pension providers receiving transfer business. It may also be of interest to employer sponsors of DB schemes and employee benefit consultancies.
Our proposals will affect retail consumers seeking to transfer benefits from DB schemes to DC arrangements. This consultation paper may therefore be of interest to these consumers or to consumer groups representing them.
Next steps
We want to know what you think of our proposals and welcome comments using our online response form by 15 April 2015. This is a shortened consultation period, to enable us to have updated rules in place for June 2015.
We will consider your feedback and publish our rules in a Policy Statement in June 2015.
Find out more:
For more information:
- FCA Handbook
- The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2015
- Pensions Schemes Bill 2014-15
- CP14/11: Retirement reforms and the Guidance Guarantee
- CP14/16: Proposed rules for independent governance committees
- CP14/24: Charges in workplace personal pension schemes
- PS14/17: Retirement Reforms and the Guidance Guarantee, including feedback on CP14/11
- PS15/3: Final rules for independent governance committees, including feedback on CP14/16
- PS15/4: Retirement reforms and the guidance guarantee
- PS15/5: Final rules for charges in workplace personal pension schemes and feedback on CP14/24