Providers and the FSA face a race against time to have individual pension accounts (IPAs) available ...
Providers and the FSA face a race against time to have individual pension accounts (IPAs) available from April 2001 after the Government announced it still plans to launch the wrapper alongside stakeholder.
Economic Secretary Melanie Johnson announced on 11 December there would be no new regulatory burden on the pension and fund industries, allowing the industry to offer IPAs to savers from April 2001.
Nigel Stammers, pensions strategy manager at Clerical Medical, said the Government is to bypass some of the normal legislative process in order to push IPAs through in time.
He said: "They have said the legislation they are putting in place will be included in the next Finance Bill and Financial Service Markets Act, which will not be written until the summer."
This legislation, which will involve the rules under which IPAs will operate and the application of the stamp duty reserve tax (SDRT) exemption, is to be applied retrospectively to products launched from April 2001.
The FSA must now work on ensuring its regulations are in place for April as well as aiming to achieve a method under existing legislation to allow the marketing of IPAs. Steven Cameron, pensions development manager at Scottish Equitable, said he was surprised the legislation was being rushed through and added the real test would be if any provider or adviser wanted to get involved in IPAs from April.
He added: "We will have to go through the Finance Bill before we can even conclude whether the Treasury has addressed the many questions raised across the industry."
Alison Michell, a senior policy adviser at Autif, said the announcement had come as a surprise to the industry and the main concern is how the FSA will frame its legislation on SDRT for unit trusts.
Michell said that, as things stand, unit trusts would have to set up separate funds to access IPAs because Oeics can have different share classes for institutional, retail and pension investors into the same fund but unit trusts cannot.
She said: "What the Revenue is proposing to do is apply the SDRT at the share class level for Oeics but they cannot apply that as simply to unit trusts, which still account for 75% of funds under management." The FSA will issue a consultative paper early next year on issues such as the handling SDRT on unit trusts.
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