Consultation Paper on Revised Pension Rules

Closed 7 Nov 2019

Opened 12 Sep 2019

Results updated 18 Feb 2020

Feedback statement on Pension Rules and Guidance


We asked

We asked for feedback on proposals for potential enhancement to the regulatory framework for pensions under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2000 (the “Fiduciaries Law”).

14 responses were received from a cross section of industry, trade associations and other industry participants.  Between the 14 respondents a total of 410 individual comments were provided.  Whilst in some areas there was broad agreement between the respondents the diverse nature of the pension scheme and gratuity scheme business undertaken within the Bailiwick was also evident.

Further feedback was also obtained from one to one meetings with various stakeholders conducted on the content and subject matter of the Consultation Paper.

Overall the consultation has highlighted evidence of support, a willingness by stakeholders to continue to be involved and helpful suggestions to further the foundation built so far. 


You said

The majority of the feedback received sought to address matters of interpretation, drafting detail, the scope of the application of the rules and to highlight challenges that might be faced in the application of the proposed rules in practice.


We did

A significant amount of the feedback received during the consultation process has been addressed in the drafting of the final version of the Rules.

The following is a summary of certain key points extracted from the consultation responses including instances where as a result of respondent recommendations material modifications have been made to the original proposal:


  • [Governing documentation]The documentation included within the definition of Governing Documentation has been amended to correspond with the traditional view of what might constitute the governing documents of a Scheme.  Provisions relating to Service Provider obligations are now found alongside scheme documentation rules;
  • [Governance committee]In light of feedback regarding practical implementation the rule regarding the circumstances under which a Governance Committee might be appointed has been redrafted as guidance;
  • [Documentation relating to the scheme]The requirement to disclose records of meetings to Scheme Members has been removed but the overall requirement to keep scheme members appropriately informed remains;
  • [Information for new joiners]The Rules now provide that member borne charges disclosure need not be made where “not practical” to do so.  However, new guidance has been added outlining the GFSC’s expectation that Licensees will be in a position to provide an explanation to scheme members of the charges that might apply, where identification of all specific charges is not practical.  Similar amendments have been made in relation to the rule concerning provision of information about benefits;
  • [Contributions]The rule has been amended to reflect a longer 60 day notification requirement for contacting the Scheme Members in relation to the non-payment of contributions by an employer;
  • [Member borne charges]The rule requiring notification to members of lack of capital growth has been clarified.  The rule will apply where the value of a Member’s Account is not significant enough to avoid being completely exhausted by Member Borne Charges before the Member reaches retirement age; 
  • [Provision of information about benefits]The rule regarding the provision of information about benefits to members of defined benefit basis schemes who are pre-retirement has been updated to provide greater certainty regarding the frequency of the provision of information;
  • [Transfers]The guidance note regarding the risks that might arise during a transfer has been amended to reflect that Licensees should assume a risk based approach when considering whether to raise any risks with the transferor; and
  • [Investment direction]A significant amount of comment was received regarding the prescriptive nature of the rules for investment direction and practical difficulties in applying those to occupational pension schemes.  The provisions relating to the licensee directed investment approach and the third party directed investment approach have been amended and the sections relating specifically to occupational pension schemes have been removed. The list of permissible investments for Schemes with the Third Party Directed approach has also been removed.

A number of further, less material amendments have been made in response to the consultation responses received.

Other comments were received where the decision was taken to keep the drafting consulted upon, including:

  • Fair Treatment of Scheme Members – views on the fair treatment of Scheme Members varied, with some objections to this provision being received. We believe fair treatment is a core principle, key to the maintenance of a reputable financial services sector and in line with the GFSC’s functions of customer protection. This rule has, therefore, been retained;
  • Pension Scheme and Gratuity Scheme Quarterly Returns – Following feedback on the continuation of quarterly reporting, we will continue to keep the position under review, however given that we have yet to complete the first full round of Annual Returns and that in some cases the information received from Licensees has not been of the highest quality, the GFSC does not feel it is currently in a position to remove the requirement for the completion of Quarterly Returns for Schemes; and
  • Member borne charges – Concerns were raised that licensees may have to spend unreasonable amounts of time in seeking information relating to member borne charges due to a lack of co-operation from service providers.  Licensees may wish to consider whether that service provider remains suitable for the scheme in such circumstances.


We would like to thank everyone who responded to the Consultation Paper.

Next Steps

The GFSC considers that that the provisions of the new Rules broadly reflect the current practices of the licensed sector but nevertheless, in line with the requests of respondents to the consultation, a reasonable period of time will be allowed for licensees to take any necessary steps to ensure compliance with the Rules. Licensees will therefore be required to comply with the provisions of the Rules from 1 January 2021. In due course the GFSC will host stakeholder feedback sessions on the new Rules highlighting significant changes and providing an opportunity to address further specific queries.





Purpose of the Consultation Paper

The Commission seeks to regulate and supervise financial services in the Bailiwick of Guernsey, with integrity, proportionality and professional excellence, and in so doing help to uphold the international reputation of the Bailiwick of Guernsey as a finance centre.

Consistent with the Commission’s objectives, the proposals in this Consultation Paper are designed to enhance the levels of confidence and security in the Bailiwick’s regulatory and supervisory framework for private pension provision.

The purpose of this Consultation Paper is to seek feedback from all interested parties on detailed proposals for potential enhancement to the regulatory framework under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2000 (the “Fiduciaries Law”) with the objective of ensuring that the regime continues to be both compliant with international standards and appropriate for the Guernsey market.

The publication of this Consultation Paper follows the Commission’s review and consideration of feedback received on the Discussion Paper issued in March 2019 and earlier feedback received from industry stakeholders in relation to The Pension Licensees (Conduct of Business) & Domestic and International Pension Scheme and Gratuity Scheme Rules (No.2) 2017 (“the Rules”).

This Consultation Paper provides an opportunity for review of the feedback provided in respect of the Discussion Paper and the earlier feedback and to provide greater clarity regarding the proposals to revoke Rules 2 to 9 of the existing Rules and to introduce the proposed changes to Rule 10 of the existing Rules. It should be noted that a separate consultation on proposals for a revised Fiduciary Handbook is taking place concurrently with this consultation and licensed pension providers and other interested parties should consider these separate proposals in addition to the proposals in this Consultation Paper.

The detailed proposals are set out in draft Pension Rules which are provided in the Appendix to this paper.

The Consultation Paper is a working document and does not prejudge any final decision to be made by the Commission.


What happens next

The closing date for the Consultation Paper is 7 November 2019. Responses to this Consultation Paper will be considered by the Commission with a view to issuing the Pension Rules in final form.



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