Below is the text of Mr Major’s written Parliamentary Answer on Pensions (Investor Protection) on 10th April 1987.
Mr. McCrindle Asked the Secretary of State for Social Services if he will now announced the investor protection arrangements for occupational and personal pensions.
Mr. Major I have published today a paper setting out our proposals for the investor protection arrangements that will apply to personal pensions and contracted out money purchase occupational pension schemes under the Social Security Act 1986. Copies are available in the Library. The paper is being given a wide circulation to interested parties, and comments are invited by 11 May.
The investor protection proposals confirm that the Government intend to rely wherever practicable on the extensive investor protection regulatory framework provided by the Financial Services Act 1986. The marketing and selling of personal pensions will be subject to rules made under the Act, though separate arrangements are proposed for those types of pension scheme that do not fall within the scope of the Act. Administrative charges for personal pensions will not be controlled, at least for the time being, in the expectation that charges will stabilise at acceptable levels as a result of competition and disclosure.
For completeness, the paper also sets out the Government’s proposals on investment controls and disclosure of information. Draft regulations on these subjects have already been published for comment.
In preparing the investor protection framework our aim has been to strike a balance between the need to safeguard scheme members’ interests on the one hand and the necessity of ensuring that effective competition between pension providers is not hampered by over-regulation. We believe the balance is right, and I am glad to acknowledge the invaluable assistance we have received from members of the group convened by my right hon. Friend the Secretary of State to advise us on these matters.