The Pensions Drawdown Transfer Window

The January football transfer window is now open and all fans are living in hope that their club will sign top players and make big transfers – my team needs both a keeper and a striker. Hope springs eternal…

The football transfer window will close on 31 January, but the transfer window for scheme members in non-advised pension drawdown will open on 1 August.

Shortly before Christmas, the FCA released policy statement PS19/30 – Independent Governance Committees: extension of remit (

You will recall that the FCA introduced Independent Governance Committees (IGCs) in 2015, to assess the value for money delivered by providers of workplace personal pension schemes. Fast forward to July 2019, and the FCA published PS19/21, which mandated that providers of drawdown solutions create four investment options (or “investment pathways”) for savers moving into non-advised drawdown, depending on their intentions and time-horizons. 

And so we come full circle. With PS19/30, the FCA has extended the remit of IGCs to include oversight of investment pathways, and ESG (environmental, social and governance) issues. This means that any firm intending to offer drawdown options to non-advised clients will have to establish a governance committee, or extend its remit where one is already in place.

The FCA policy statement includes two very important deadlines:

6 April 2020 – Governance Committees must be in place
1 August 2020 – Investment Pathways are to be implemented.

Clearly, these timelines are very tight, with little more than two months for providers to either establish a governance committee, or contract a third-party to provide a governance advisory arrangement, an outsourced IGC. The reasoning behind the 6 April deadline is to allow the IGC to influence the design of the investment pathways before they are launched. From PS19/30: “IGCs should be in place in time to assess the proposed design of pathway solutions, raise any concerns with the firm, and for the firm to respond before pathway solutions are offered to consumers.” 

There is a third option, and this brings us back to our transfer window. Providers with fewer than 500 non-advised customers entering drawdown each year could benefit from an easement option, where they can choose not to offer investment pathways and therefore not require governance oversight. However, if they choose this option, they will have to refer all customers to the MAPS service or offer a transfer out to an alternative provider that does offer Investment Pathways.

Either option results in a transfer away, with the resulting loss of assets and potential fees. So, a commercial and proposition decision will need to be made – invest in pathways and the required governance or lose assets.

There are very few big transfers in the Football January transfer window but we could see some big drawdown transfers from August.

This blog first appeared in Pension Funds Insider.

Share this post

About Us

PTL is an award-winning provider of independent trustee and governance services, serving clients across the UK. Our specialist team of professional trustees deliver a pragmatic, personable and professional service to help you effectively manage your scheme.