For many retirement savers finding the best way to realise pension plan benefits will be the key to unlocking a financially secure retirement.
Pension transfers, whether from a defined benefit plan into a QROPS, SIPPs or other vehicle, are likely to be an important consideration as part of this process. However, in recent years it has become clear that although pension transfers can be advantageous for many individuals, particularly those who live abroad in the European Union, a minority of advisers are failing to properly examine the question of suitability, thereby resulting in some investors being saddled with an unsuitable product.
This is why it is good news to hear that The Pensions Regulator has announced plans to regularly share market intelligence on defined benefit transfers with both the Financial Conduct Authority and The Pensions Advisory Service in order to help all parties involved forge a better understanding of the risks involved in a pension transfer.
According to The Pensions Regulator, the information-sharing will occur in the following ways:
- The sending of weekly reports to The Financial Conduct Authority and The Pensions Advisory Service.
- Monthly conference calls between The Financial Conduct Authority, The Pensions Advisory Service and The Pensions Regulator.
- Quarterly meetings with the Pension Protection Fund to discuss important issues as they arise.
In addition, the regulator has said that it has developed two template letters:
- One for pension scheme trustees to help them clarify their obligations.
- One for members to use at the transfer value quote stage – this will include key aspects to consider as well as information about where they can go to receive impartial guidance
Meaningful cooperation
The Pension Regulator says that when it identifies issues with a scheme, it will share the information with The Financial Conduct Authority and The Pension Advisory Service.
Furthermore, the joint protocol agreement states that “where the FCA wants to contact a particular pension scheme directly to get information from the trustees on financial advisory firms advising on transferring out the scheme, it will first seek TPR’s agreement”.*
* https://www.fca.org.uk/publication/mou/fca-tpr-tpas-joint-protocol.pdf page 6
The above article was kindly provided by Blacktower Financial Management Group and originally posted at: https://www.blacktowerfm.com/news/664-pension-transfer-info-to-be-shared-by-regulators