Of interest to all schemes and members considering flexible access to DC benefits is the publication on 27 November 2014 of the Financial Conduct Authority’s (FCAs) policy statement on retirement reforms and the guidance guarantee. The proposed standards and rules for the guidance providers are expected in their final form soon after the Pension Schemes Bill 2014-15 receives Royal Assent in early 2015.
The policy statement reports on the main issues arising out of the FCA's July 2014 consultation and sets out near final standards for designated guidance providers and rules for firms delivering the guidance guarantee. It also contains information on the FCA's monitoring role relating to the standards and the further work it intends to undertake as a result of the wider pensions reforms.
The majority of respondents to the FCA’s consultation broadly agreed with the proposed standards and rules. The standards that received the most specific comments were “professional standards” and “content of the session” where respondents asked for more detail and prescription. Although the FCA has made changes and provided clarification in some areas, overall the policy intention remains broadly the same.
The FCA has prepared the near final standard and rule instruments on the basis that the Pension Schemes Bill 2014-15, which is currently going through Parliament and to which the standard and rules are linked, receives Royal Asset in its current form. The FCA proposes to make the instruments as soon as possible after the Bill receives Royal Assent which is expected in the first quarter of 2015.
In the first half of 2015, the FCA also plans to:
- consult on its policy for making recommendations to designated guidance providers and HM Treasury as part of its monitoring approach;
- develop its monitoring approach in liaison with HM Treasury and designated guidance providers; and
- conduct a wider review of its rules in the pensions and retirement area.
In the second half of 2015, the FCA plans a full review of designated guidance providers' compliance with the standards.
The FCA has also published for consultation by 2 February 2015 its proposed changes to its fee and levy regimes. This forms part of its annual cycle of fees consultation.
View the policy statement.
View the fees consultation paper.