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<p>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.</p><p>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><p>In 2016, the FCA
reviewed IGCs and found that they were “generally effective” in influencing and advancing
cost reductions for members. The review also found that the Independent Project Board’s
work in auditing high legacy charges and implementing IGCs had been successful. As
a result, a substantial majority of consumers received improved outcomes regarding
costs and charges, with 1m consumers receiving reduced costs and charges.</p><p>The
FCA has announced that it will undertake a further review of IGCs in 2019/20.</p>
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