PP gives a run-down of how the Treasury will act to remove ‘unjustifiable barriers' to people looking to access their pension pots under the pension freedoms.
In its response to the consultation on pension transfers and early exit charges published yesterday the government revealed the next steps to introduce a cap on early exit charges and require trust-based schemes to regularly report on transfer performance.
The response builds on the chancellor's announcement on 19 January that the government would introduce legislation to place a new duty on the FCA to cap early exit charges.
Key points of action:
- The government will act to limit early exit charges for people seeking to access the pension freedoms, by introducing legislation to place a new duty on the FCA to cap early exit charges.
- The FCA will be responsible for setting the level of the cap and will consult fully on this in due course. It will set out its next steps in this process shortly; with a view to implementing its duty to cap early exit charges before the end of March 2017.
- The government will introduce legislation in the Bank of England and Financial Services Bill to amend the Financial Services and Markets Act 2000. This will give the FCA a duty to make rules requiring relevant firms to limit the early exit charges imposed in relation to contract-based schemes, as set by the FCA.
- In parallel with the FCA process, the government will consider how existing powers to limit pension charges can be used to implement a comparable cap on early exit fees in trust-based schemes.
- The Pensions Regulator (TPR) will work alongside the FCA as they develop the design and level of the cap for FCA-regulated schemes to ensure that any relevant concerns are appropriately addressed for all consumers. This is despite current evidence suggesting that a smaller proportion of members of trust-based schemes might incur early exit fees when leaving their pension than in relation to contract-based schemes.
- Government will introduce a new requirement for trust-based pension schemes to regularly report on their performance in processing transfers.
- TPR will issue new guidance for scheme trustees to ensure transfers are processed quickly and accurately.
- Pension wise will develop guidance on pension transfers (a pensions transfers ‘roadmap') in order to support individuals through the transfer process. This will include providing free and impartial information on schemes' statutory requirements, and their responsibilities in terms of managing a safe and efficient transfer process for Pension Wise users.
The Pensions Regulator (TPR) has substantially increased the usage of its powers against trustees – posting a sharp rise in the use of formal information gathering powers and High Court production orders during the three months to the end of September....
More than half of BlackRock’s flagship UK defined contribution (DC) default fund’s assets will be invested in ESG strategies by June 2021.
The Pension Schemes Bill has completed its third reading, crossing its latest hurdle in the House of Commons.
An amendment to the Pensions Schemes Bill which would have seen people given a pre-booked Pension Wise appointment ahead of accessing their retirement savings has been defeated.
A proposal to ensure savers receive a Pension Wise appointment prior to accessing their retirement pot has received cross-party support in parliament, while Labour seeks net-zero pensions by 2050.