FCA launches pension freedoms audit

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The FCA has written to the chief executives of all pension providers as part of an investigation into the roll out of the pension freedoms.

Firms are being asked to detail the options offered to customers seeking to access their savings; advice requirements for people who want to transfer out of schemes or into retirement products; how insistent clients are being treated; transfer procedures; and exit charges.

The regulator will use the data to inform the Treasury’s recently announced consultation into the barriers faced by customers.

The regulator says that while “a minority” of firms have suffered “some operational issues” the situation is improving.

Based on a survey of 84 per cent of the market, average call waiting times have fallen from 4.5 minutes to 3.5 minutes since the early weeks of the reforms taking effect.

Average call times have also reduced, to 8.5 minutes down from 10 minutes.

Call abandonment rates have also fallen, from 20 per cent to 16 per cent.

In addition, the regulator found 53 per cent of customers accessing their savings took all or some of their pot as cash.

The FCA is consulting on its pension rules over the summer, including incorporating the ABI’s code of conduct and considering its new second line of defence rules.

In addition, the review is looking at the decumulation market with the regulator planning to request more information from providers later in the year.

The Pensions Regulator is conducting a parallel audit of occupational trust-based schemes, as well as investigating the impact of the freedoms on defined benefit schemes.

It says: “The information gathered will complement our existing discussions with multi-employer and large single employer schemes that already provide, or are considering offering, new flexible decumulation options.

“These discussions will examine more broadly the operational readiness, governance and member communications of these schemes. We are also undertaking activity to understand the impact of new flexibilities on defined benefit (DB) schemes, any subsequent risks and the application of our regulatory guidance.”