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You are viewing the version of the document as on 2023-07-31.

COBS 19.2 Personal pensions, FSAVCs and AVCs

Financial promotions

COBS 19.2.1GRP

A financial promotion for1 a 1FSAVC should contain a prominent warning that, as an alternative1 an AVC arrangement 1exists, and that details can be obtained from the scheme administrator (if that is the case).1

Suitability

COBS 19.2.2RRP

When a firm prepares a suitability report it must:

  1. (1)

    (in the case of a personal pension scheme), explain why it considers the personal pension scheme to be at least as suitable as a stakeholder pension scheme;

  2. (2)

    (in the case of a personal pension scheme, stakeholder pension scheme or2 FSAVC) explain why it considers the personal pension scheme, stakeholder pension scheme or2 FSAVC to be at least as suitable as any facility to make additional contributions to an occupational pension scheme, group personal pension scheme or group stakeholder pension scheme23 which is available to the retail client; and5

    232
  3. (3)

    (in the case of a pension transfer, other than where the only safeguarded benefit involved is a guaranteed annuity rate, where the proposed arrangement is a personal pension scheme, stakeholder pension scheme or defined contribution occupational pension scheme that is not a qualifying scheme) explain why, at the time of the personal recommendation, it considers the proposed arrangement to be more suitable than the default arrangement of an available qualifying scheme.5

COBS 19.2.3RRP

When a firm promotes a personal pension scheme, including a group personal pension scheme, to a group of employees it must:

  1. (1)

    be satisfied on reasonable grounds that the scheme is likely to be at least as suitable for the majority of the employees as a stakeholder pension scheme; and

  2. (2)

    record why it thinks the promotion is justified.

Attachment (or earmarking) orders

COBS 19.2.4GRP

4A firm should take into account the existence of any attachment (or earmarking) orders in respect of a client’s personal pension scheme or stakeholder pension scheme.

COBS 19.2.5GRP
  1. (1)

    4An operator should ensure that it is aware of, and acts fully in accordance with, any attachment or earmarking orders made in respect of any members of that scheme by a court.

  2. (2)

    In particular, an operator should be mindful of its obligations under an attachment order to give notices to other parties, including transferee operators and relevant former spouses, where relevant events occur, such as transfers and significant reductions in benefits.

  3. (3)

    A firm, when advising a client in relation to a personal pension scheme or stakeholder pension scheme, or in relation to a pension transfer or pension conversion, should enquire as to whether an attachment order exists and take it into account accordingly.