SPP wants more time for rules on digital modellers
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The pensions market must support consumers, but regulators should be wary of additional costs and complexity, the Society of Pension Professionals has said in response to a consultation closing this week, and is calling for an extended deadline.
The Financial Conduct Authority consultation 'Adapting our requirements for a changing pensions market', which closes on Thursday, seeks industry views on proposed rules to support consumers using digital pension planning tools and those making non-advised decisions to transfer DC pensions.
“Like the FCA, the SPP would very much like to see a pension market that helps consumers navigate their financial lives, where pensions deliver value for money and consumers have the ability to make informed decisions. However, regulators must be wary of adding additional costs and complexity to this process, especially at a time when schemes are dealing with a wide range of other regulatory and legislative changes,” said David James, who chairs the SPP’s DC Committee.
The SPP is concerned about what it considers “an overly ambitious” timeline for implementing the FCA’s proposed changes in relation to simulations in digital tools, saying this should be doubled to 24 months to allow for consumer testing of tools.
It said it agrees with the application and scope of the proposed regime, including that the use of stochastic models should be encouraged to project futures returns and that firms should have flexibility in how they communicate the outputs of pension modellers and digital tools.
Record-keeping, regular review proposals and the proposed triggers for the application of the non-advised transfer rules are appropriate and reasonable, it said.
However, it calls on the FCA to introduce guidance or caps on future growth assumptions, saying these projections would either have to be grounded in expected market returns or firms would have to disclose how their projects compare with market benchmarks.
Figures shown to consumers by pensions modellers must be “useful and comparable” to allow savers to make well-informed choices, it added.
