Levy payers could see their contributions to the new single guidance body cut after the Money Advice Service transferred millions to fund the body.
In its Annual Report and Accounts 2018/19, Mas stated that it finished 2018 with a surplus of £3.1m, on top of initial reserves for the period of £4.5m.
This allowed it to take £7.6m to the new body, which was created this year out of the merger of Mas, Pension Wise and the Pensions Advisory Service.
The Money and Pensions Service can’t hold reserves because it is an arm’s length body of the Department for Work and Pensions.
According to Mas' annual report, DWP, HM Treasury and the Financial Conduct Authority agreed that the total reserves from Mas would be used to reduce the funding request from Maps for 2019-20.
Mas stated that using its reserves "will effectively result in funds being returned to levy payers".
FTAdviser reported in April that the new guidance body has set a budget of £118.6m, excluding the pensions dashboard, which will cost an additional £8.2m for the set-up process.
There are two levies funding Maps: the general levy on pension schemes collected by The Pensions Regulator and the financial services levy collected by the FCA from a wider pool of firms, including advisers.
Maps has set a budget of £36.9m for pensions guidance - with £31.2m sourced from the levy collected by the FCA and £5.7m sourced from the levy collected by TPR.
In 2017, FTAdviser reported that Mas had allocated £500,000 towards the cost of transitioning to the new guidance body.
Mas had come under fire from MPs in the past for spending too much money on marketing and duplicating others’ services.
An independent review in 2015 called for Mas to “reboot its business model” as part of wide-ranging changes.
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.