The Financial Conduct Authority has finalised how it will monitor the performance of The Pensions Advisory Service (TPAS) and Citizens Advice Bureau in delivering the guidance guarantee.
Although the organisations are not regulated by the FCA, the city watchdog is responsible for setting standards for the Pension wise service, monitoring compliance, and making recommendations when standards slip.
In a document published today, the regulator set out how the process would work.
It said it would make if problems were identified it could make recommendations to the organisations to prevent the failures recurring and to compensate those affected.
These recommendations will not be published and will only be made after discussing the issues with the organisation targeted, which will have two weeks to respond.
But the FCA said if it was not satisfied with the response a "senior FCA staff committee" can ask the Treasury to enforce it's recommendation.
It said examples of where we might make a recommendation to a designated guidance provider and the Treasury, included but were not limited to, circumstances where it believed:
• a designated guidance provider's non-compliance with FCA standards poses a serious threat to financial services consumers
• there are issues that indicate a widespread problem or weakness at a designated guidance provider
• a designated guidance provider has failed to comply with an action plan (agreed with the designated guidance provider further to our monitoring of the designated guidance providers and prior to making any recommendations)
• a designated guidance provider failed to bring the potential breaches of FCA standards to the attention of the FCA
• the conduct in question is particularly egregious
The FCA reiterated that individual complaints would be handled by the Parliamentary and Health Service Ombudsman.
Commenting on the policy, Pinsent Masons partner Stephen Scholefield said: "Pension wise is key to the success of the government's pension reforms, providing much needed guidance to pension savers.
"Consumers and providers should be reassured by the FCA's monitoring. Finalising the FCA's recommendation policy is an important step towards achieving a guidance framework under which savers don't live to regret their decisions."
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