Regulatory Alerts2019-06-03
Default Regulations
The Financial Sector Conduct Authority's Retirement Funds Supervision Division issued this guidance to outline the implementation of Regulations 37 through 40, which mandate retirement funds to establish default investment portfolios, preservation arrangements, and annuity strategies for members. Trustees must ensure these default options meet strict criteria regarding fee reasonableness, performance transparency, and member best interests, while providing mandatory retirement benefits counselling before joining, leaving, or retiring. The regulations require funds to issue paid-up membership certificates for departing members without conversion fees, facilitate seamless transfers to new employers, and demonstrate ongoing compliance to the authority, with existing arrangements required to align by March 2019.