Regulations 18C to 18E requiring referral of members to pensions guidance inserted

Regulations 18C to 18E of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 were inserted with effect from 1 June 2022 by the Occupational and Personal Pension Schemes (Disclosure of Information) (Requirements to Refer Members to Guidance etc.) (Amendment) Regulations 2022 (S.I. 2022/30)¹. Equivalent provision was made in Northern Ireland, where regulations 18C to 18E of the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 2014 were inserted with effect from the same date by the Occupational and Personal Pension Schemes (Disclosure of Information) (Requirements to Refer Members to Guidance etc.) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/115)².

The duty applies where a member has an opportunity to transfer flexible benefits, or where a member or survivor is accessing flexible benefits. The Northern Ireland regulations define an opportunity to transfer flexible benefits as arising where the member has transferrable rights in relation to flexible benefits, or would have them if the member stopped accruing rights to some or all of those benefits, and the making of a transfer or transfer payment is not prohibited by Article 119(4)(a) of the Pensions (Northern Ireland) Order 2005, or where the member has an opportunity under the scheme rules to transfer accrued rights to flexible benefits out of the scheme². A member stops accruing rights to flexible benefits when there are no longer arrangements in place for the accrual of rights to those benefits for or in respect of the member².

"Pensions guidance" is defined in both sets of regulations by reference to section 4 of the Financial Guidance and Claims Act 2018, meaning information or guidance provided by any person in pursuance of the requirements mentioned in that section². "Flexible benefit" takes its meaning from section 74 of the Pension Schemes Act 2015, and "survivor" from section 76(1) of that Act².

The two instruments are separate: S.I. 2022/30 applies in England, Wales and Scotland, and S.R. 2022/115 applies in Northern Ireland². The Northern Ireland regulations were made by the Department for Social Development and came into operation on 6 April 2014, with the referral provisions inserted later². The 2013 regulations were made by the Secretary of State for Work and Pensions, laid before Parliament and came into force on 6 April 2014¹.

Why it matters for households

From 1 June 2022, trustees and managers of occupational and personal pension schemes in Great Britain and Northern Ireland have been required to refer members and survivors to pensions guidance at the point of transferring flexible benefits or accessing them. The requirement sits alongside the existing disclosure duties in the 2013 and 2014 regulations, which set out what information schemes must give members and when, including time limits such as two months from membership beginning and three months after a change takes effect².

The referral duty is separate from the requirement to take regulated financial advice, which applies to transfers of certain safeguarded benefits above a set value. The disclosure regulations also set out penalties for non-compliance: a penalty of up to £5,000 in the case of an individual and up to £50,000 in any other case, payable within 28 days².

What happens next

No further commencement dates for these provisions have been reported. The 2013 and 2014 regulations have been amended on several later dates, including 1 August 2022 and 1 October 2022, in connection with collective money purchase schemes and statements of benefits for money purchase benefits².