New QROPS Rules
The Government today announced the changes as a result of their consultation regarding pensions.
From April 2015 transfers from DB pensions to DC pensions will need to be accompanied by UK FCA licensed advisers advice. This is good news as it will only increase the quality of advice given by advisers. Schemes that are substantially underfunded will have the right to refuse transfers. This could include Police pensions and NHS pensions as these schemes are we believe substantially unfunded. Schemes have the right to apply the new rules before April if they wish to.
The FCA also issued new guidelines for transfers. These included several interesting points for the International Market.
Among these guidelines they stated.
- priority to the members’ own requirements
- advisers shouldn’t focus solely on critical yield analysis without full consideration of wider member circumstances
- should establish adequately the level of risk a member is willing and able to take
- fund recommendations must match the assessed risk profile of the member
- advisers must give consideration of the tax position of the client
All of these points we agree with as a company. As more news comes out, I will update this site.
Nigel Green deVere Group.
Blog written 21st July