The regulator is understood to be open to suggestions from the industry as to how a new commission regime could operate in a more liberal way in the corporate pensions market because of the reduced risk of consumer detriment the sector poses.
Aegon says the problems identified by the FSA in the individual retail market do not translate directly to the corporate market and argues that imposing individual market solutions will not work and could be potentially damaging.
Although receiving little attention in the FSA’s discussion paper, Aegon points out that group personal and stakeholder pensions fall within the scope of the RDR even though the role of the employer makes the group market very different from the individual market.
Aegon says that from initial discussions with the FSA it is clear that workplace pensions fall within the scope of the RDR and that this is an area in which it wants to receive feedback so it does not place unnecessary burdens on advisers.
An FSA spokesman says: “The scope of the RDR includes the corporate market, and we are very interested in how the proposals in our discussion paper might apply. We recognise that there are a number of important differences between the corporate and individual markets, such as the decision-making role of the employer. To the extent that certain proposals may not deliver the intended outcomes that we set out in the discussion paper, we want the industry to put forward alternative suggestions. We are also particularly interested in whether there is scope for delivering more advice on an individual basis to employees through the workplace, for instance by using ‘primary advice’ services.
Steve Cameron, head of business regulation at Aegon says: “The corporate market has been largely forgotten in the RDR debate so far. But if we don’t have a proper discussion of its particular needs we risk imposing solutions that are designed for the individual market and which couldcause collateral damage. This is a huge market that gets millions of people saving for retirement so it shouldn’t be ignored.
“We should also grasp this opportunity to explore different ways of regulating the corporate pensions market to recognise the central role of the employer. By changing the disclosure regime and applying customer agreed remuneration at employer level we can encourage greater employer and employer engagement in pension saving.”