Government consults on pension memberborne commission

first_imgThe government has launched a consultation into the most effective means of regulating to prevent charges being imposed on members of workplace pension schemes used for automatic enrolment to recover the cost of commission paid to an adviser.This consultation follows the government’s announcement in March 2014 that it intended to prohibit member-borne commission payments to an adviser in relevant occupational pension schemes from April 2016.The consultation sets out two options for preventing member-borne commission payments.The first proposal puts a duty on pension trustees to ensure that members are not charged for the cost of any commission payments to advisers in relation to new commission arrangements, and that they endeavor to remove any existing member-borne commission arrangements. The second option set out by the government suggests placing the duty on service providers.The government has proposed a phased introduction for the ban. This includes making regulations to ban new member-borne commission arrangements from 6 April 2016, or an employer’s staging date if later, and then consulting on draft regulations to implement the ban on existing arrangements later next year.The consultation paper notes that many providers have already removed commission arrangements from their qualifying pension schemes in anticipation of the ban, while others are taking steps to remove these by April 2016.The consultation opened on 26 October and will close on 27 November 2015.last_img read more