Pensions minister Ros Altmann wants to introduce regulation for advice given to employers on their choice of pension scheme.
Taken from http://citywire.co.uk By William Robins
Currently firms or individuals who recommend a pension scheme to an employer to enrol their staff onto are not regulated.
In 2012 the Pensions Regulator (TPR) raised concerns this could lead to employers receiving ‘incorrect advice’ when meeting their auto-enrolment deadlines. However, the government has not moved to fix the issue since then.
Altmann said she was working with TPR to ensure employers are not ’enticed’ into putting staff into an unsuitable pension scheme of any kind.
‘That is something I have been trying to work with the regulator on,’ she said.
‘I think you do need good controls which think we do not have to ensure the employer is not enticed in to unsuitable pension schemes.’
She said many of the firms and individuals currently recommending pension schemes to employers would not be able to do the same for individuals.
‘It probably should have some kind of regulation in it,’ Altmann said. ‘But currently there isn’t any. For the big companies I don’t think [there’s an issue], but if you are a one man band, and someone who hasn’t heard of pensions, you do need some assurance the person who is helping you set up the scheme is qualified properly to do so.’
Master trust insurance
Altmann said she was also moving to introduce an insurance scheme to protect members of master trusts, but her proposal for a pensions bill containing the legislation was turned down at the end of last year.
Master trust schemes are not currently protected by an insurance scheme in the way that contract-based schemes are covered by the Financial Service Compensation Scheme and defined benefit schemes are covered by the Pension Protection Fund.
While some master trusts use insurance, such as the National Employment Savings Trust, there is no formal requirement to do so.
Altmann said compulsory insurance would require legislation and that she has asked the government for a pensions bill to be brought in in this parliament but has so far been refused.
‘We need legislation and have been bidding for a bill, a pensions bill but it has been refused. It was refused at the end of last year and it has still not happened,’ she said.
‘I am hoping we will get one because we can’t do anything properly without it. We do need to give the Pensions Regulator more powers, I’m convinced of that.’