One of the areas highlighted last year by the Regulator was the regulation of workplace DC pension schemes, particularly contract based arrangements such as personal pension schemes and group personal pension schemes, which are commonly being used by employers for auto enrolment purposes. The Regulator shares the regulation of these and some other arrangements with the FCA and in an attempt to clarify the roles of each in protecting consumers, the Regulator and FCA, on 21 March, published an overview of how workplace DC pensions are regulated, particularly aimed at market participants such as employers, trustees and pension providers.
The underlying theme in the overview is that both the Regulator and the FCA have similar expectations for scheme quality and member outcomes in relation to both trust based and contract based arrangements. It also refers to the DWP proposals for the development of minimum quality standards in all DC workplace pension schemes which will focus on areas such as administration, governance and charges.
- View the November 2013 edition of Pensions Pieces which refers to the DWP's consultation on these standards.
Note that the Government has now issued a Command Paper, following this consulation, called 'Better Workplace Pensions: Further measures for savers' (27 March 2014). There will be more detail on this in our next edition of Pension Pieces.
The guide says that both the Regulator and the FCA will work with the DWP (amongst others) to incorporate the quality standards into their regulatory activities.
The overview is a useful reminder of the role of each regulator - e.g. it highlights that the Regulator’s remit is focused exclusively on workplace pension schemes whilst the FCA's responsibilities extend beyond workplace pension schemes and across a multitude of financial services. Further, it says that the Regulator is more likely to take the lead where there are problems with an individual scheme and the FCA where the issue is caused by the pension provider. If there are potential implications for both regulators, they will agree who should take the prominent role and may undertake a joint investigation if appropriate.