Defined Benefit  

Pension schemes to carry out extra checks on advisers

Pension schemes to carry out extra checks on advisers

The Pensions Regulator has told pension scheme trustees they will need to carry out extra checks on advisers before allowing a transfer to go ahead.

In an update to its guidance for schemes, issued on November 11, the regulator stated trustees will need to contact advice firms to check if the financial adviser listed on a member's defined benefit transfer documents is employed with them, or alternatively check an appropriate third-party directory.

Pension scheme trustees were already obliged to check if the adviser has the correct permissions to carry out the transfer.

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But due to the Senior Managers and Certification Regime being introduced by the Financial Conduct Authority next month, advisers who are not senior managers will no longer appear on the FCA's register.

The pensions watchdog is therefore introducing the additional steps of confirming the employment link of the adviser for trustees, it stated.

Meanwhile, a new directory containing data on certified individuals, those that are not approved senior managers, will be released in 2020 by the FCA.

The FCA introduced the SMCR in an effort to "reduce harm to consumers and strengthen market integrity" by making individuals more accountable for their conduct and competence in the financial services industry.

The scheme has already rolled out to banks and insurance companies and will apply to all 47,000 companies the FCA regulates on December 9.

Under the regime anyone who holds a senior management function will need to be approved by the regulator and every senior manager will need to fill out a statement of responsibilities explaining what they are responsible for.

FTAdviser reported in May that TPR is working on a guide for trustees to provide appropriate support to members who are considering a cash transfer.

This will be part of a wider content hub for trustees that are facing employer restructure or changes.

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