FCA to clarify IGC reporting standards


Independent governance committees (IGCs) monitor the policies of these providers and are required to report all costs and charges

The Financial Conduct Authority (FCA) will clarify how independent governance committees (IGCs) should disclose charges over the summer.

An update on the regulator’s website said the clarification will follow the publication of IGC annual reports. It also acknowledged there is some ambiguity about new rules introduced last year to improve fee transparency for members in contract-based schemes.

The rules apply to life insurers and some Sipp operators that provide workplace personal pensions.

IGCs monitor the policies of these providers and are required to report all costs and charges, including transaction costs, to members of workplace pension schemes.

The first publication of data under these rules is expected to take place this summer, when IGCs publish their annual reports.

But the FCA said it has received correspondence from firms expressing concern about how the rules should be applied. It has subsequently held talks with both firms and IGC members that revealed contrasting views about how the data should be published.

In the update the FCA said: These discussions have revealed different views among stakeholders as to whether the data should be published at the level of the arrangement with each individual employer, or whether it should be published at a higher level, with the data indicating the range of charges paid by members in different employer arrangements in one overarching scheme.

Two of the competing views from firms are whether data disclosure should happen at individual employer level or the HMRC registered scheme level.

The FCA said the former aligns more closely with its aim for the rules.

It added: We generally support an approach to comparisons that aggregates charges at the level of cohorts of similar employer arrangements, to the extent that such an approach would allow a participating IGC to compare its own provider’s individual employer arrangements with comparable arrangements at a cohort level, as well as enabling cohort to cohort comparisons.

It said: It will be for individual IGCs or governance advisory arrangements (GAAs) to determine which approach, or combination of approaches, is most appropriate, and it is for IGCs to determine where best to focus their attention.

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