PS14/17: Retirement Reforms and the Guidance Guarantee, including feedback on CP14/11

Published: 27/11/2014     Last Modified: 10/03/2015

This Policy Statement reports on the main issues arising from Consultation Paper 14/11 Retirement reforms and the Guidance Guarantee and publishes near final standards and rules.

Why are we publishing this paper?

In July 2014 we consulted on the standards for the bodies (initially The Pensions Advisory Service and Citizens Advice) delivering the guidance guarantee, and changes to our Handbook resulting from the wider pension reforms that were announced by Government in the 2014 Budget.

Both instruments are linked to the Pension Schemes Act 2015, which received Royal Assent on 3 March 2015.  The FCA Board has now formally made the rules covered in this policy statement. Read the final rules instrument and the final standards instrument.

This Policy Statement also contains further information on the monitoring role of the FCA in relation to the standards and about further work we intend to undertake as a result of the wider pension reforms.

In CP 14/11 we also asked questions on raising the levy to fund the pensions guidance service. We have taken these responses into account in the proposals in the annual consultation on FCA fees CP 14/26.

Policy Statement 14/17 [PDF]

Who does this Policy Statement affect?

This Policy Statement will be of interest to:

  • providers of pensions and retirement income products
  • designated guidance providers.
  • trustees of Defined Contribution (DC) pension schemes (and schemes with a DC element)
  • employer sponsors of DC schemes (and schemes with a DC element)
  • providers of other financial services products that play a role in consumers’ retirement planning
  • those providing advice and information in this area already
  • distributors of financial products, in particular retirement income products
  • trade bodies representing financial services firms
  • consumer representative bodies
  • charities and other organisations with a particular interest in retirement and/or financial services more generally
  • individual consumers

What are the next steps?

Firms that operate personal and stakeholder pensions will need to act to make the necessary changes to enable them to comply with the final rules once they are made and come into force. In order to facilitate this, we have published ‘near final’ rules in this Policy Statement.

Organisations designated by the Treasury as designated guidance providers need to ensure that they are designing their services in line with the near final standards published in this Policy Statement.

We will continue to engage with the Treasury and the designated guidance providers as the pensions guidance service is implemented. We will also engage with them as we develop our monitoring approach.

We anticipate formally making the standards and rules as soon as possible if the Bill is passed in its current form. Royal Assent is currently expected in the new year before the end of this Parliamentary session.

We will undertake a thorough review of the rules in the pension and retirement area in 2015 as we seek to ensure there is appropriate consumer protection in place following the reforms to the pension and retirement market. We expect to publish the results of our thematic review of annuity sales practices and the provisional findings of our Retirement Income Market Study in due course. We will use the outputs from both pieces of work to inform our wider review.

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