In Regulatory Update 42, the PIA has introduced the
rule changes which it had previously been considering introducing
in relation to pension transfer and opt-out business (see Financial
Services Brief 28 page 18, and PIA Consultative Paper 24). This
means that all firms which wish to carry out such work must:
- Have a designated "pensions expert" who will have one of the
Associate or Fellow of the Institute or Faculty of Actuaries;
Associate of the Pensions Management Institute (by
Advanced Financial Planning Certificate Paper G60;
Certificate of Pensions Practice (Occupational Pensions Board).
- Ensure that all pension transfer and opt-out business which is
not carried out by the pension transfer expert is checked by that
specialist before the transfer or opt-out is effected.
These procedures must be in place by 31st March
The nominated expert will have until 31st March
1999 to obtain the relevant qualifications. These proposals are
important because they show the PIA's commitment to eradicating
further pension mis-selling problems, and attempting to allay the
fears of the public that further mis-selling may occur. They also
tie in with the overall approach of all the regulators to hold
specific persons within organisations responsible for discrete
areas of their business - the so called "Responsibilities of Senior
Management". In this case, the competence of the pension transfer
specialist will be crucial for a firm to show that it is complying
with the rules governing sales of pension transfers and opt-outs.
There may be a short-term shortage of appropriately qualified
persons prepared to take on this responsibility, and affected firms
who have not yet appointed an appropriately qualified pensions
expert should do so quickly.