UK Government consults on early exit charges and pension commission regulations
The Department for Work and Pensions (DWP) has launched a consultation on draft regulations regarding the cap on early exit charges for occupational pension schemes and restrictions on member-borne commission payments.
The consultation, which will run until 31 May 2017, seeks views on the draft Occupation Pension Schemes (Charges and Governance) (Amendment) Regulations 2017.
These regulations would restrict early exit charges for members of workplace pension schemes to enable eligible members over the age of 55 to take advantage of the pension freedoms. The proposed cap is 1% of the value of the member’s benefits being taken, converted or transferred for existing members of occupational pension schemes, and a ban for new members of these schemes.
The cap is in line with the Financial Conduct Authority (FCA) cap on early exit charges for personal and stakeholder pensions, which came into force on 31 March 2017. This followed a consultation that ran between 26 May and 18 August 2016. The DWP ran a similar consultation for occupational pensions between 26 May and 26 August 2016. Responses to both consultations have been taken into account for the draft regulations, which are set to come into effect from October 2017.
Full Content: Employee Benefits
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