The rule was the prime example of using regulations to try to fix a badly designed policy and product. Old-style pensions were too expensive but stakeholder did not allow companies to make enough from pensions to sell them without radically changing the structure of their businesses.
Stakeholder did not reach the target market in any significant numbers. Now, with personal accounts on the horizon and business plans being thrown into disarray again by Government plans, the FSA board decides to keep the rule. Why? To try to fix badly designed personal pension accounts using a clumsy regulatory device perhaps? What happened to principle-based regulation? The regulator is in danger of making a fool of itself.