FCA cautions of abroad pension plan transfer danger



The FCA has actually advised of enhanced danger to customers when abroad companies refer specified advantage (DB) plan participants to UK companies for pension plan transfer suggestions.

The regulatory authority has actually advised controlled advisors that the Customer Task guidelines – as a result of start in July – should put on suggestions to these transfers.

The FCA stated that it was “worried” regarding abroad companies targeting the UK pension plan advantages of specified advantage (DB) plan participants that are living overseas.

In a governing notification today, it stated UK companies involving with abroad companies – or supplying suggestions to plan participants based outside the UK – should comply with their governing duties.

These consist of Customer Task, it states, as well as especially the obligation to proactively provide “excellent results” for retail consumers as well as to prevent triggering near injury to retail consumers.


The FCA has actually released the caution as a result of the frequency of the “abroad suggestions version.”

In this version a participant based overseas, such as a deportee employee, is come close to by an abroad company regarding moving their UK Defined Advantage (DB) pension plan advantages right into an alternate pension plan plan. The FCA states this is typically an abroad pension plan plan or a UK-based global self-invested individual pension plan (SIPP) holding overseas financial investments.

It advised advisors that where the plan participant has a cash money comparable transfer worth (CETV) over ₤ 30,000, they should obtain ‘ideal independent suggestions’ from an FCA-authorised company prior to plan trustees can move pension plan advantages to a specified payment (DC) plan. This need uses whether the participant is based in the UK or overseas.

Participants with a CETV listed below ₤ 30,000 might additionally pick to obtain transfer suggestions or organize transfers without suggestions.

The FCA stated that in many cases the abroad company presents the plan participant to a UK suggestions company entirely for suggestions on moving their DB pension plan funds.

The abroad company will typically suggest on or embark on the suggested plan for the moved funds. Once it’s verified that the participant has actually obtained ‘ideal independent suggestions’ on the transfer from the UK company as well as on the participant’s demand, the abroad company calls the UK DB plan trustees to organize the transfer of the participant’s pension plan advantages right into the different pension plan plan as well as overseas financial investment.

DB plan trustees should evaluate the application to move, the FCA stated, as well as they have different responsibilities that are laid out in the thorough assistance from the Pension plan Regulatory Authority (TPR) ‘Dealing with Transfer Requests’ In these instances the abroad companies are not FCA authorized however might be controlled by an abroad regulatory authority.

Pertinent guidelines as well as assistance consist of SYSC 6, COBS 2, COBS 9, COBS 19, Concepts 2, 3, 6, 7 as well as 9 as well as the FCA’s Finalised Advice 21/3 (FG 21/3).

From 31 July, the Customer Task (Concept 12 as well as PRIN 2A) establishes greater as well as more clear criteria of customer security throughout monetary solutions as well as needs companies to place their consumers’ requirements initially.

• Resource Link: https://www.fca.org.uk/firms/accepting-pension-transfer-referrals-overseas-advisers-uk-authorised-firms-responsibilities


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