Pensions news

Week ending 2 August 2019

Guy hangs on

Guy Opperman has been re-appointed as the pensions and financial inclusion minister.

New DWP rules for CMA’s recommendations

The DWP has issued a consultation on its proposed rules to bring into force the CMA’s recommendations for trustees to run tender processes for fiduciary management services and to set objectives for investment consultants. The proposal is for trustees to confirm their compliance with the new rules as part of the existing scheme return process. The rules are planned to come into force on 6 April 2020.

New draft guides from TPR

The Pensions Regulator has released four draft trustee guides for consultation covering tendering for fiduciary management and investment consultant services, setting objectives for investment consultants and choosing an investment governance model.

TPR’s 2019 DC survey

The Pensions Regulator has published the report on its 2019 survey of DC schemes. This found that 71% of members are in schemes meeting all of the applicable key governance requirements, as compared to 54% in 2018 and 32% in 2017. However smaller schemes are still struggling with governance with 6 out of 10 small schemes not meeting any of the applicable key governance requirements.

Contingent charging to be banned

The FCA has published a consultation proposing a ban on contingent charging for DB transfers. Contingent charging is when an adviser is only paid if the transfer takes place. The proposed rules are expected to come into force in early 2020. The FCA has also asked if all schemes should be required to offer partial transfers.

The FCA has also published the final rules coming out of its Retirement Outcomes Review which:

  • introduce four investment pathways for customers going into non-advised drawdown
  • require that customers can only be invested in cash in drawdown products if they make an active choice to do so
  • require that annual information on costs and charges should be provided as a single monetary value for customers in decumulation products.

These rule changes will come into force on 1 August 2020.

BAT buys in

British American Tobacco’s UK pension scheme has completed a £3.4 billion buy-in with Pension Insurance Corporation, covering the benefits of 10,600 members.