FCA introduces new duties for Independent Governance Committees

The FCA has published a policy statement introducing new duties for Independent Governance Committees (IGCs).

Firms which offer workplace personal pension schemes (including life insurers and some SIPP operators) are currently required to have an IGC to provide independent oversight and scrutiny of the value for money offered by the schemes.

The policy statement places on IGCs:

• a duty to consider and report on their firm’s policies on environmental, social and governance (ESG) issues, member concerns and stewardship, for the schemes that the IGC oversees, and
• a duty to oversee the value for money of investment pathway solutions for pension drawdown (from 1 August 2020, firms will have to offer investment pathways to non-advised consumers entering drawdown).

The FCA has also issued related guidance for providers of pension products and providers of investment-based life insurance products.

IGCs will have to report annually on their firm’s relevant policies and on the value for money of their firm’s (proposed) pathway solutions. This information will have to be included in IGC annual reports on and from 6 April 2020.