UK - Delays in clarifying A-Day rules could expose financial advisers to misselling claims, Winterthur Life warns. Winterthur blames the delays on last-minute additions to the Finance Act by the Treasury and the department for work and pensions.
Winterthur pensions strategy manager Mike Morrison (pictured) fears that IFAs and their clients will make the wrong choices, as they will not be aware of the best options available.
The simplification rules will be introduced as part of the Act in April 2006 but Morrison warned: “There are a lot of important decisions to be made and delays mean that some clients may not get what is best for them.
“The devil will be in the detail. We think we know what will emerge but we cannot be sure. We are still a long way from a final, simplified regime and can expect further information from a number of sources, including the Treasury, the Capital Taxes Office, the DWP and even the Financial Services Authority.”
Morrison pointed out one area of confusion was over the reallocation of pension assets.
Morrison said that if a father and his son worked for the same employer – but were members of different schemes – it was uncertain whether the father could reallocate part or all of his surplus pension to his son in the event of the father’s death.
Morrison said: “Under the new rules, the Finance Act provisions allow reallocation to members of the same ‘sch-eme’. But what is not clear is does the ‘scheme’ referred to mean the XYZ pension scheme or the ABC grouping of plans?
“This is not the only area where we are still waiting for the detail. We must have a prescribed date by which the new regime is complete and all regulations or even guidance notes are issued to give advisers sufficient time to advise their clients.”
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.