We have consulted on our proposed rules for Independent Governance Committees (IGCs). Our consultation ran from 6 August 2014 to 10 October 2014. We are in the process of considering the responses that we received.
IGCs and Workplace Pension Reform
The Financial Conduct Authority (FCA) has been working with the Department for Work and Pensions (DWP) and the Pensions Regulator (TPR) on a package of reform measures to ensure high quality workplace pension schemes. As part of these reform measures, IGCs are being introduced through FCA rules to ensure minimum governance standards for contract based workplace pensions, such as group personal pensions and group SIPPs. These new bodies will act in the interests of scheme members in assessing the value for money of workplace pension schemes. IGCs will raise independent challenge to the providers of schemes on value for money issues.
Why are we proposing rules on IGCs?
The UK has an aging society, with many people not saving enough for their retirement. As part of the government’s policy response to this challenge, automatic enrolment of employees into workplace pension schemes began in July 2012. Under automatic enrolment, employees may be enrolled into schemes without making any active choice about how their pension assets are invested. We believe this makes it especially important to ensure that workplace pension schemes deliver the best possible value for money.
Who is our proposed rules be of interest to?
This consultation paper will be of interest to:
- the providers of workplace personal pension schemes, including personal pension schemes and stakeholder pension schemes which employers either use for automatic enrolment or otherwise make available to their employees
- consumers who have workplace personal pensions and consumer groups seeking better protection for consumers with workplace personal pensions
- employers and their advisers, in relation to the selection and ongoing monitoring of workplace personal pension schemes
- fund managers and other third parties providing services to firms operating workplace personal pension schemes
What are the next steps?
We intend to publish our policy statement and final rules for IGCs early in the New Year. We expect our final rules to come into force on 6 April 2015, alongside other pension reform measures.