Guidance from FCA and Pensions Regulator to support employers welcomed by expert

The guidance, published in the form of a factsheet (4 page / 179KB PDF), is designed to support companies or trustees to identify what advice or information is caught by the Financial Services and Markets Act 2000, and what advice can be freely given. It also signposts other publicly available guidance.

Pensions expert Bruno Geiringer of Pinsent Masons, the law firm behind Out-Law.com, said the guidance would be helpful to employers and pensions trustees.

“What is particularly welcome in this guide is that it does not just tackle issues around pensions but also looks at a wider range of financial products that are now more likely to be part of a benefits portal that employers offer to employees such as ISAs and other workplace savings products,” Geiringer said.

“As employers step further and further back from just providing options for pensions savings and are looking to provide more accessible and easier to manage savings vehicles, this guide is helpful, particularly for employers who need to know how they can stay out of the regulatory regime,” Geiringer said.

The guidance said employers and trustees only need authorisation by the FCA if they are in the business of providing investment advice and if they receive a commercial benefit from helping their employees.

It said information on the merits of participating in an occupational pension scheme was not caught by restrictions on promoting financial products. However, factual information presented in a way to promote the scheme or persuade individuals to join it could constitute a financial promotion.

Similarly, exemptions apply to allow employers to promote products such as employee share schemes, some insurance products, staff mortgages or loans such as travel card loans.

The guidance warned that employers and pension trustees are unlikely to be able to advise employees on questions about which investment funds they ought to choose or whether to pick an Individual Savings Account (ISA) instead of a pension scheme. It said that employers and trustees could be liable for any losses incurred if they did give their employees advice on such matters.