The ‘second line of defence’ additional protection for pension savers announced by the FCA this week will be extended to trust-based schemes, the Government has confirmed.
Yesterday, the FCA wrote to the CEOs of pension providers revealing it will be adding new rules to compel providers to challenge customers over their decisions when accessing pension pots.
It was unclear whether trust-based schemes would also have to implement the changes as the FCA only regulates contract-based schemes.
But during House of Lords report stage on the Pension Schemes Bill, Lord Newby, speaking for the Government, confirmed the rules would apply across all types of pension scheme.
He said: “The DWP is working with The Pensions Regulator to consider how this can be best dealt with for trust-based schemes on the same basis. We have it in-hand.
“We are hoping to achieve this in line with the timetable for contract-based schemes.”
Lord Newby added it was likely the FCA board would ratify the rules at its meeting next month.
As a result of the changes, when a customer contacts their pension provider to access their pension, providers must now ask about key aspects of their circumstances that relate to the choice they are making, such as health and lifestyle choices or marital status.
The requirements are in addition to an existing obligation on providers to point consumers to the Government’s Pension Wise guidance service.