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.)