Retirement risk warnings—requirements for FCA-regulated pension providers

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

  • Retirement risk warnings—requirements for FCA-regulated pension providers
  • The FCA rules for retirement risk warnings
  • The generic risk warnings from 1 November 2019
  • The tailored risk warnings
  • Who must provide the tailored risk warnings?
  • When must the tailored risk warnings be provided?
  • Trigger events
  • Circumstances when COBS 19.7 does not apply
  • Three-step process for the provision of the tailored risk warnings
  • Step 2 optional in certain circumstances
  • More...

CORONAVIRUS (COVID-19) UPDATE: To enable providers to give effective retirement risk warnings, the FCA has produced a table suggesting questions providers should ask members to make members aware of the implications of any decision they may make during the coronavirus pandemic.

With effect from 6 April 2015 (when the pension freedoms were introduced), provisions were inserted in legislation and the rules of the Financial Conduct Authority (FCA) Handbook which require trustees, managers and providers of contract-based and trust-based schemes to give members with flexible benefits (ie money purchase or cash balance benefits) information about their retirement options, mainly in the form of a ‘wake-up pack’. For more information, see Practice Notes:

  1. Retirement communications in FCA-regulated pension schemes, and

  2. Retirement communications in occupational DC schemes

To provide a 'second line of defence' for people who decide not to use the free and impartial pensions guidance available to help them choose a retirement option, the FCA and the Department for Work and Pensions (DWP) have introduced provisions requiring pension providers and trustees of defined contribution (DC) occupational pension schemes to give appropriate retirement risk warnings to scheme members seeking to access their pension pot.

This Practice Note focuses on the provision of retirement risk warnings as required by the FCA in respect of the pension providers it regulates.

For information on equivalent requirements applicable to

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