Consultations on a few issues have taken place or commenced over the past quarter.
Consultation on pension scams proposes limits to statutory transfer rights
The Government has consulted on combating pension scams. The proposals include restricting rights to transfer pension benefits, and a ban on cold calling in relation to pensions.
Call for evidence on bulk DC transfers without consent
The Government has consulted on bulk transfers of defined contribution benefits without member consent. Under current legislation there are two basic conditions for making a bulk transfer of members' benefits to another scheme without their consent: (a) the transferring scheme actuary must certify that the transfer credits to be acquired in the receiving scheme are "broadly no less favourable" than the rights to be transferred; and (b) broadly, the two schemes must relate to employment with the same employer, or if the employers are different they must be in the same group or the transfer must be in consequence of a financial transaction between the employers.
The call for evidence recognises that the current rules had been designed with defined benefit schemes in mind. There is potential for uncertainty as to how to interpret the "broadly no less favourable" test in a defined contribution context, and the existing requirements regarding the relationship which must exist between the employers of the transferring and receiving schemes may be an unnecessary barrier to transfers which would benefit scheme members. The call for evidence, which closed on 21 February 2017, sought views on current practice, the effect of the current rules and whether they should be altered.
Consultation on creating single financial guidance body in place of MAS, TPAS and Pension Wise
The Government has consulted on creating a new single financial guidance body which will replace the Money Advice Service (MAS), the Pensions Advisory Service (TPAS) and Pension Wise. The consultation closed on 13 February 2017.
Consultation on improving pension and investment transfers and re-registrations
The Transfers and Re-registration Industry Group (TRIG), comprising representatives of eight trade bodies including the ABI, has published a consultation on improving the processes for transferring and re-registering assets between pension providers. The FCA, Pensions Regulator and DWP have been consulted on the proposals. The consultation closed on 31 January 2017.
FCA consultation on changes to Financial Services Compensation Scheme
The FCA has issued a consultation on how the Financial Services Compensation Scheme (FSCS) is funded and the FSCS rules regarding payment of compensation. Under the heading "Updating FSCS compensation limits and activities in light of the pension freedoms", the consultation seeks views on different options, including whether to increase the limits on claims relating to investment provision and the intermediation of life, pension and investment products. It states that the FCA is also considering extending or increasing the level of coverage of the FSCS in relation to some activities, including products and services used to manage pension savings. The consultation closes on 31 March 2017.
Corporate governance consultation
In response to the Government's consultation on corporate governance, the parliamentary Select Committee on Work and Pensions recommended that large private companies and those with over 5000 defined benefit pension scheme members be made subject to the FRC's Corporate Governance code on a "comply or explain" basis, and that scheme trustees should be added to the list of people to whom directors are required to have regard under the Companies Act 2006.
