Following a consultation with key stakeholders earlier this year, the Government of Jersey has pledged to introduce a phased, proportionate approach to the regulation of private pensions provided by local financial services businesses.
The Government launched an initial consultation in November 2018, to establish whether pension regulation should be introduced in Jersey. Following generally supportive responses, the Government launched a further consultation to establish principles for regulation, and how the relevant agents and authorities could work together.
The proposed regulations will focus on the specific risks in the Jersey market and seek to avoid over-burdening providers with onerous record-keeping and reporting, so that it can remain cost-effective. State pensions will remain unaffected by these regulations.
The introduction of regulation will also be phased. This will allow providers time to prepare for the new obligations and will enable the Government to assess the impact of each stage of regulation.
In Phase 1, the Government will focus on addressing the key consumer harms in the market, including high fees by service providers, a lack of transparency on fees imposed on members’ benefits, and unsuitable advice. It will do this by introducing direct regulation for investment businesses service providers.
In Phase 2, the Government proposes to extend the remit of the Channel Island Financial Service Ombudsman to include all private pension schemes to resolve current consumer barriers to making and resolving complaints in the local pension market. This will equalise the standards required of lay and professional trustees and ensure a better service for members.
In Phase 3, the Government will introduce pass legislation to regulate all local tax-approved pension products and service providers. This will include providers in the retail market, and the private market.
Assistant Minister for External Relations, Constable Richard Buchanan said: “Currently pension providers are largely captured under other sections of our financial services legislation. This move will show further progress and allow a more focused and appropriate approach to ensuring all aspects of the Island’s financial services is captured by regulation.”
More information on the proposals is available on the Government of Jersey website.
Government of Jersey News Release.