FCA Business Plan 2016/17 – Pensions

The Financial Conduct Authority (FCA) has this week published its Business Plan for 2016/17.

This includes several planned activities in relation to pensions:

  • Retirement outcomes review. This review will be launched in 2016/17 and will consider the impact of the new defined contribution pension flexibilities introduced on 6 April 2015. It will include consideration of how consumers react to “wake-up packs” issued during the period leading up to their retirement and how they use and respond to the various annuity comparison tools.
  • Early exit charges cap. The FCA will be consulting on the level at which a cap on early exit charges should be set.
  • Changes to FCA pensions rules and guidance. The FCA will publish a policy statement in this year’s second quarter and will publish final rules and guidance.
  • Secondary market in annuities. The FCA, the Treasury and other parties will work to create a consumer protection model for the secondary annuities market scheduled for April 2017.
  • Effectiveness of independent governance committees (“IGCs”). In 2016/17, IGCs will be reviewed to assess how effective they are in helping pension providers deliver value for money to policyholders. IGCs will be assessed against the Independent Project Board recommendations.
  • Cracking down on scams. The FCA intends to co-ordinate its intelligence and activities on pension scams and unsuitable advice, enabling the FCA to take action as necessary. (There is considered to be a heightened risk arising from the ability to release pensions as cash.)
Please do not hesitate to speak with your usual Linklaters pensions contact if you would like to discuss these or any related pensions issues.