No surprises, just implementation challenges in final FCA IGC rules

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Tuesday, 10 February 2015

The Financial Conduct Authority (FCA) has published its final rules on the workplace governance committees contract-based pension scheme providers must set up for group personal pensions and group stakeholder pensions from 6 April 2015.

Commenting on the FCA rules, PSIT's Simon Riviere said: “There are no surprises in the FCA’s final rules for Independent Governance Committees (IGCs) and Governance Advisory Arrangements (GAAs) as they are in line with the initial proposals published back in August. However, providers now only have two months to comply and, for some, this may be tough."

IGCs need to have five members, the majority being independent from the provider. For smaller, less complex schemes, a GAA can fulfil the IGC responsibilities. The FCA’s confirmation that deferred members also fall within the mandatory scope of IGCs and GAAs adds further depth to their important role of ensuring members receive value for money from the workplace pension scheme.

Simon Riviere continues: "That is one of the big issues - what does value for money actually mean? There’s no agreed definition. To work effectively, these new governance committees need to include people who can bring to the table a broad experience of different types of pension scheme. Perhaps the simplest way to comply and access all the experience you need is to work with people, like PSIT, with pensions governance expertise who can take on the role of independent chair or act as a complete GAA."

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