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FSA sends old pension guidance to employers

The FSA is being criticised by product providers for sending employers guidance first issued in 1994 permitting them to give staff advice and information on personal pensions.

Life office experts argue that the old guidance flies in the face of legislation issued recently, which requires that anyone giving stakeholder worksite presentations should be authorised.

The FSA is sending out the information in a bid to reassure employers who fear they are in danger of overstepping the boundaries on pension guidance, potentially leaving themselves vulnerable to future redress from employees.

Some experts fear that, if acted on, the 1994 guidance could mean that employers are giving staff illegal advice on stakeholder.

The leaflet tells employers: “You can give advice and information about per-sonal pensions in general, that is, without focus on the merits of any particular personal pension scheme. This is because general advice does not count as investment advice.”

But FSA spokeswoman Jackie Blyth says: “This guidance will remain in place. Authorisation only applies if the employer stands to gain from recommending a product, for example, by earning commission.”

The ABI has told its members that it expects the FSA to issue further guidance following consultation early next year and the regulatory implications for employers.

Scottish Life head of communications Alasdair Buch-anan says: “The leaflet does not get across the strength of more recent legislative material. What it is suggesting is not consistent with previous comments in CP61 and RN53.”

Clerical Medical pensions strategy manager Nigel Stammers says: “It does need clarification – the longer it is left grey, the longer employers will not get involved because of fears of repercussions.”

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