The FSA is proposing an extension to the scope of its rules to incorporate group personal pensions.
The announcement, published in a consultation paper regarding the Government’s workplace pension reforms, is designed to mitigate the risk of poor advice being given in relation to occupational pension opt-outs.
FSA director of conduct policy Sheila Nichol says: “These proposals mainly affect those involved in the provision, distribution and operation of group and individual personal pensions. But anybody who has a pension now, expects to make contributions in the future, or who will be automatically enrolled from 2012 will also be affected.
“With the introduction of automatic enrolment and Nest, the pension landscape is going to change significantly. It’s crucial that we update our requirements so consumers are protected and we identify and remove any overlaps between FSA and DWP rules that might create unnecessary barriers for employers.”
A DWP spokeswoman says the FSA proposals will help prevent regulatory overlap and mitigate unnecessary burdens being placed on employers. She adds: “This is a major step towards making sure that rules and regulations for the pensions industry are aligned and that automatic enrolment is introduced smoothly.”
The FSA is proposing three key changes to its COBS rules in relation to GPPs.
Firstly, it is seeking to clarify how the distance marketing directive applies in relation to auto-enrolment into GPPs.
Secondly, the FSA proposes a removal of the requirement to include a statement on the existence of stakeholder pensions in the disclosure information for GPPs being used for auto-enrolment.
Finally, it suggests aligning the cancellation rules with the DWP opt-out literature.
The consultation will close on February 9, 2011. The FSA will then finalise proposals in light of responses received with a view to publishing a policy statement, together with the final handbook text, in the second quarter of 2011.
The changes resulting from the consultation will be implemented on October 1, 2012, when the workplace pension reforms come into effect.