Government papers: Occupational pensions: capping early exit charges and prohibiting existing member-borne commission charges

The government has responded to the consultation on the Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017.

Key findings:

• The draft regulations are intended to introduce a 1% cap on early exit charges in relation to existing members of occupational pension schemes and ban early exit charges in relation to members who joined these schemes after the regulations come into force.
• The draft regulations also prohibit charges being imposed on members of occupational pension schemes used for automatic enrolment to recoup the cost of commission payments made to advisers after 1 October 2017, and in relation to agreements entered into before the 6 April 2016.
• Overall, respondents to the consultation considered that the draft regulations achieved the policy intent of capping or banning early exit charges and banning existing member-borne commission in certain occupational pension schemes.

The government has published statutory guidance on capping early exit charges for trustees and managers of occupational pension schemes, and service providers.