We have published rules that require the providers of workplace personal pension schemes to set up and maintain independent governance committees (IGCs). The rules come into force on 6 April 2015.
Why are we publishing this Policy Statement?
In August 2014 we consulted on our proposed rules for Independent Governance Committees (IGCs). This Policy Statement summarises the responses to our consultation, provides our response to the feedback and publishes the final rules.
IGCs are a key part of the improvements in the governance of workplace pensions and are a significant step in a package of measures aimed at improving the value of workplace pensions.
IGCs will have a duty to act solely in the interests of scheme members and will operate independently of the provider. They will assess and, where necessary, challenge providers on the value for money of workplace personal pension schemes.
Who does this Policy Statement affect?
This policy statement affects the providers of workplace personal pension schemes. Workplace personal pension schemes include personal pension schemes and stakeholder pension schemes which employers either use for automatic enrolment or make available to their employees.
This policy statement is also likely to be of interest to:
- employers and their advisers, in relation to the selection and ongoing monitoring of workplace personal pension schemes
- fund managers, administrators and other third parties providing services to firms operating workplace personal pension schemes
- consumers who are members of workplace personal pension schemes and consumer groups seeking better protection for consumers with workplace personal pensions
What are the next steps?
The rules will come into force on 6 April 2015. Firms will be expected to comply from that date. Firms that already have IGCs in place will need to ensure that they meet the rules from 6 April 2015.
We intend to hold a forum for IGC Chairs around the time that our rules become effective.
IGCs will be new governance bodies and we will want to ensure that they are operating effectively. We intend to conduct a review of the effectiveness of IGCs in 2017.
Find out more:
- CP14/16: Proposed rules for independent governance committees
- Dear CEO letter - The Establishment of Independent Governance Committees for Workplace Pension Schemes