Part 2: Financial Services Section 35: Early exit pension charges
This section amends FSMA to insert new section 137FBB (FCA general rules: early exit pension charges). This requires the FCA to make rules preventing specified charges being imposed on members of pension schemes who take, convert or transfer pension benefits after they have reached normal pension age but before their expected retirement date. Subsection (1) of new section 137FBB imposes this requirement on the FCA, and subsection (2) sets out the purpose which must be served by the FCA rules: to prevent early exit charges being a deterrent against members dealing with their pension benefits in this way. Subsection (3) sets out how FCA rules may identify the early exit charges to be banned, and subsection (4) ensures that it will not be possible to impose any of the specified early exit charges after the rules come into force, even if the pension scheme to which they relate was established before that date. Subsection (5) provides examples of the provision which may be made in FCA banning early exit pension charges. Subsections (6) and (7) define early exit charges for the purpose of these provisions, and subsection (8) gives the Treasury power to identify matters which may not be treated as early exit charges under these provisions.