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Amps rejects FSA Sipp disclosure proposals

The Association of Member-directed Pension Schemes has rejected FSA proposals to increase the disclosure requirements for Sipp providers.

In March, the regulator proposed forcing all personal pension schemes, including Sipps, to produce key features illustrations, effect of charges and reduction in yield information.

The FSA said: “To help consumers or their advisers compare alternative pension products and identify the most appropriate pension option, we think our rules should require that comparable information is always made available.

“In order to achieve this, we are proposing that the existing Sipp exemptions are removed from Cobs 13 and Cobs 14, and the same disclosure rules applied to all personal pension schemes, whether branded as a Sipp or not.

“This approach will be consistent with the approach of the Department for Work and Pensions, which does not distinguish between different types of personal pension scheme and requires statutory money purchase illustrations for all personal pensions, whether branded as a Sipp or not, and regardless of the underlying assets.”

The proposals have been criticised by the Sipp industry, with A J Bell marketing director Billy Mackay warning they will not improve comparability between pension products.

Amps chairman Andrew Roberts says: “It is clear that there is political motivation for consumers to understand the cost of their pension, whatever form that pension might take.

“Government need to be encouraging the population to save though as otherwise people will have to work longer which reduces the number of jobs for the younger generation. Focus should be on understanding the benefit of a pension, not the cost.

“In terms of cost, it should be sufficient for consumers to understand broadly what price bracket a personal pension falls into and this can be done in a number of ways without worrying about spurious accuracy.”

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Richard Brown 31st May 2012 at 8:39 pm

    Here we go again: fixated by charges.

    Listen, there is nothing wrong with charges, provided they are more than matched by performance. I remember a certain Stewardship Fund, which charges 6% against the market 5%. It out-performed the market in spite of that fact. Products need service and that costs money: very low charges can mean very poor performance (stakeholder pensions?).

    Can we please get away from this old chestnut? It’s one of the many aspects of navel watching which is ruining public trust in products which they need. Up till the credit crunch, which the powers that be failed to see coming, we were increasing our ability to provide for our futures, but reducing that provision.

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