Ban on employer-promotion of pensions lifted

Financial Secretary Stephen Timms announced the exemption along with a package of deregulation moves in a Commons statement in which he said legislative changes to implement the reforms should be in place by next spring.

Timms also announced he is freeing Citizens Advice Bureaux to provide financial advice and other debt-related support to those seeking help.

He proposed that ‘business angels’ are to be allowed to self-certify themselves as having sufficient funds or expertise so as to increase the pool of investment funds available to small businesses.

And he said he would ease the regulation of Open Ended Investment Companies ‘to enable them to compete on a more even basis with authorised unit trusts’.

Those relating to business angels and OICS will require further consultation.

Timms said the pension regulation change was required to tackle the problem of 11.3 million workers not currently making any contribution to private pension schemes, and pointed to the reluctance of employers to promote the uptake of pensions to their employees for fear of being caught by FSMA.

He said he would tackle the problem by providing employers with an exemption from the FSMA financial promotion regime to allow them ‘to raise employees’ levels of awareness and understanding, and to promote the increased uptake of pensions – both in terms of raising the number of workers who take up their own pension, and raising the amount saved by those who already have their own pension.’

He said the government will later consider widening the scope of the exemption to enable the workplace to become ‘a fruitful environment for raising employees awareness and understanding about other financial services and products’.

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