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The Financial Conduct Authority (FCA) introduced rules in 2015 to require contract-based
pension providers to set up independent governance committees (IGCs) to address poor
consumer outcomes. IGCs have a duty to scrutinise the value for money of the provider’s
workplace personal pension schemes, taking into account transaction costs, raising
concerns and making recommendations to the provider’s board as appropriate. IGCs have
a duty to assess whether all the investment choices available, including default options,
are suitable for the interests of consumers.<p><strong> </strong></p>In 2016, the
FCA reviewed IGCs and found that they were “generally effective” in influencing and
advancing cost reductions for members. The FCA has announced that it will undertake
a further review of IGCs in 2019/20.
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