Retirement communications in FCA-regulated pension schemes
Retirement communications in FCA-regulated pension schemes

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Retirement communications in FCA-regulated pension schemes
  • FCA regulatory framework
  • The wake-up pack
  • Wake-up pack reminders
  • Signposting the pensions guidance
  • Communicating about specific retirement options
  • Tax implications of chosen retirement option
  • Overarching considerations whenever communicating about retirement options
  • Information requirements placed on the provider of the chosen retirement option
  • Record-keeping

Since the introduction of the pension flexibilities on 6 April 2015, changes have been made to legislation and the rules of the Financial Conduct Authority (FCA) Handbook which require trustees, managers and providers of occupational and personal pension schemes to give retiring members with money purchase or cash balance benefits certain information about:

  1. the retirement options (also referred to as 'open market options' or 'pension decumulation products') available to access their pension savings, including taking an annuity, drawdown, uncrystallised funds pension lump sums (UFPLSs) and trivial commutation

  2. the availability of free pensions guidance to help them make a decision about their retirement options, and

  3. retirement risk warnings specific to particular retirement options

This information mainly takes the form of a ‘wake-up pack’. This Practice Note explores retirement information requirements insofar as they apply to pension arrangements regulated by the FCA.

For equivalent requirements applicable to occupational defined contribution (DC) schemes, see Practice Note: Retirement communications in occupational DC schemes.

FCA regulatory framework

What are the various information requirements?

Pension providers of FCA-regulated pension schemes have to comply with various information requirements in respect of their members as they approach retirement. These requirements are as follows:

  1. the information requirement under COBS 19.4 (and COBS 19, Annex 2), namely:

    1. The wake-up pack—when the member approaches retirement, the pension provider must issue a wake-up pack