FCA say Appointed Representatives may not conduct pension transfers nor transfer safeguarded rights.
Changes to FCA rules on transfers and safeguarded rights have led Pension scheme administrators to refuse to accept transfers from network members, citing these FCA rules.
Pension scheme administrators refuse to accept transfers from network members citing FCA rules.
Leading pension administrator Towers Watson have confirmed that following FCA guidance they are unable to accept transfer requests from Appointed Representative firms regardless of how qualified they may be, because the FCA rules do not allow it.
In a recent case final salary pension transfer was stopped for the simple reason that the adviser was working for an appointed representative. Regardless of the principal firm’s permissions and the individual’s qualifications and sign off by the principal firm, the transfer was refused. The adviser had a normal appointed representative contract and the FCA pointed out that SUP 12. 2 does not allow an AR to operate as a pension transfer specialist.
This is a major blow to firms with ARs advising on pensions.
Safeguarded rights (guaranteed annuities) cannot be transferred by Appointed Representative firms because it falls under Regulated Activity Order Article 53 E and the rules in SUP12.2.2 have not been amended to confirm that. This means that many network firms may be unable to transfer safeguarded rights.
While the rules on this have not changed what is different today is twofold. Firstly that Guaranteed Annuities are taken into account under the new definition of pension transfers. Further there is additional regulatory pressure on scheme administrators to act as gatekeepers or policemen over pension transfers. This enhanced regulatory scrutiny means that the administrator firms are for the first time checking the FSA register and refusing to act for Appointed Representatives. This includes the rights to transfer safeguarded rights.
The formal list of transactions that AR firms cannot conduct are any activity that does not fall into the list in SUP 12.2.7G which in summary is
The problem is the new definition of pension transfer.
This now includes includes transfers from an individual pension contract providing fixed or guaranteed benefits that replaced similar benefits under a defined benefits pension scheme into a PPP or deferred annuity or DC occupational but not into an annuity. But it also includes a transaction to transfer safeguarded benefits to flexible benefits under another pension scheme including a lump sum that would be UFPLS. It is this last line that catches GARs.
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