PIA: Introduction of "pensions experts" takes effect - Regulatory Update 42

United Kingdom

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 following qualifications:



    Associate or Fellow of the Institute or Faculty of Actuaries;

    Associate of the Pensions Management Institute (by examination);

    Advanced Financial Planning Certificate Paper G60; or



    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 1998.

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.