Group pensions are to avoid the FSA ban on legacy commission that will hit the individual market, Corporate Adviser understands.
That means commission can still be paid after the implementation of the Retail Distribution Review where new members join schemes or where existing members’ contributions are increased.
But legacy commission, defined by the FSA as additional commission payable under a contract signed before December 31, 2012 but as a result of an event that takes place after that date, will be outlawed in the individual market.
Some experts argue this could lead to individual pensions being sold on a group basis to get round the regulations.
Steve Jackson, group pensions marketing manager at Aviva says: “Our belief is this ban does not apply to group pensions. The FSA has already made clear that commission can continue for new members and increments, both in CP09/04 and in Policy Statement 10/10.”
