Hogan Lovells

Key Dates

Clarification of meaning of "publically available free of charge on a website" given on 27 March 2018 (written response from the DWP).

Response to consultation and final regulations issued on 27 February 2018.

Consultation paper, draft guidance and draft regulations issued on 26 October 2017.  The consultation period ended on 6 December 2017.

The FCA published rules in Policy Statement (PS 17/20) requiring those managing investments to provide information about transaction costs and charges in response to a request from a relevant pension scheme, in force on 3 January 2018.

The Occupational Pension Schemes (Administration and Disclosure) (Amendment) Regulations 2018/233 in force on 6 April 2018 (subject to exceptions – see below).

The disclosure of costs and charges requirements will not apply to schemes whose most recent scheme year ends before 6 April 2018 until the last day of the first scheme year to end on or after 6 April 2018.  The consultation response explains that this means a scheme with a year end of 5 April 2018 will not be required to publish the new information until 5 November 2019 (seven months after the end of the first scheme year to end on or after 6 April 2018).

Requirements in relation to pooled funds come into force on 6 April 2019.


Summary

The DWP has issued a response to consultation and final regulations, covering disclosure of costs and charges and information about investments.  It has also issued statutory guidance on how to report costs and charges information.

The DWP comments that the Financial Conduct Authority (FCA) has made broadly similar rules in relation to workplace personal pension arrangements and stakeholder schemes.

Clarification of "publically available free of charge on a website"

The DWP has clarified that information which is to be provided "publically available free of charge on a website" (see below) must be made available to the world at large on the internet.  This contrasts with other information which must be communicated to individual members - with permitted communication methods including: by post or (subject to conditions) by email or by making the information "available on a website" -  in this case, access to online information may be restricted, for example by requiring the user to register and to have a log-in id with a password (although imposing a charge for the information is not permitted).

Scope

The new disclosure requirements will apply to "relevant schemes", that is occupational schemes which provide money purchase benefits, including schemes providing both money purchase and non-money purchase benefits, irrespective of whether the member is in the accumulation or decumulation phase.

Some categories of scheme will be exempt from the requirements, including:

Where a scheme provides both money purchase and non-money purchase benefits, the disclosure requirements will apply in relation to the money purchase benefits.

The DWP intends to consider at a future time whether to extend the requirements to cover defined benefit arrangements.

Chair's statement

The content of the chair's statement which must be produced in relation to relevant schemes will be extended to include:

This and other specified information must be made publically available free of charge on a website. Members who are entitled to receive an annual benefit statement must be told that cost and charge information is available on the internet, with the specific web address included in the statement.

Guidance

When complying with the requirements above, regard must be had to guidance from the Secretary of State.  The guidance provides in particular that:

Statement about pooled funds

Members must be told via their annual benefit statement that this information is available on request.



Date Accessed: 03/12/2021