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CII response to HM Treasury retirement consultation

Freedom & choice in pensions and the "guidance guarantee"

The CII group response to the Chancellor's pension reforms announced in Budget 2014. Our submission focuses on the "guidance guarantee" emphasising the need for standards in this area to protect the public.

We support the Chancellor's ambition behind the retirement reforms. They could however expose the customer to risks and significant unintended consequences unless appropriate essential safeguards are put in place.

  • The public must be confident in the "Retirement Guidance" offered; that whatever is given is relevant to their needs; that the organisations and/or individuals offering this Guidance have sufficient knowledge and ability to do so; and that appropriate steps are taken to manage any conflicts of interest.
  • We believe that the only way to generate such confidence is by ensuring that all those delivering Guidance should be subject to an integrated set of Standards, Training, Accreditation and Revalidation (STAR).
  • At the core of this STAR is a set of minimum standards covering quality, entry criteria and ongoing assessment. This includes high-level design and delivery standards, including possible areas of knowledge and competence. This response sets out what these standards might look like.
  • All this must be in place by April 2015 if the Government wishes to meet its criteria of quality and impartiality.
  • Training, accreditation and especially the revalidation requirements for those giving Guidance are just as important. This response also includes some high level suggestions in these areas.
  • There also needs to be some ultimate oversight of the standards, to ensure a consistently high quality across the range of provision offered. While we do not believe this warrants full FCA regulation, instead we suggest the Government explore some other model that combines the STAR approach with government oversight.

Next Steps: the CII is willing to work with HMT/FCA and the market to arrive at the right level of standards, and then help develop training, accreditation and revalidation solutions as required.

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Related items:

CII Briefing: The Chancellor's Pension Reforms - Freedom of Choice and the "Right to Guidance" (March 2014)

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