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DSS looks set to agree stakeholder with-profits ringfence

The Department of Social Security is entering into final-stage discussions with the ABI on how with-profits funds will be included in stakeholder.

According to industry experts, it looks certain that the DSS will agree to the ABI&#39s definition of an accounting ringfence for stakeholder and will reword its regulations.

The new regulations will be far less restrictive than previous plans governing the inclusion of with-profits within stakeholder which effectively insisted on life offices providing separate stakeholder with-profits funds. Under the new rules, existing funds will be able to accept stakeholder contributions

Its is also believed that the amended regulations will include rules for methods of payment. It is understood the DSS backed down on its plan for life offices to send out all annual statements on the same day, causing admin chaos.

Scottish Mutual pensions development director Leslie Gray says: “It looks like we are heading towards an accounting ringfence. If the DSS had ended up with a physical separation, it is not clear where the funds for smoothing for new stakeholder with-profits fund would come from.”

ABI spokesman Malcolm Tarling says: “We will be finalising the plans in the next two weeks but the DSS has agreed to allow stakeholder funds to be invested within with-profits.”

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