Checking up on Pension Wise to cost FCA £400k every year

Checking up on the bodies that will provide the new Pension Wise service will cost the FCA nearly £400,000 every year and an initial outlay of nearly £600,000. The regulator will have to spend as much as £562,000 to set up its operation to monitor The Pensions Advisory Service and Citizens Advice.This work is to ensure the bodies are complying with FCA standards in delivering the pensions guidance scheme to consumers.The FCA estimated it would spend as much as £395,000 in each year that it carries out this watchdog role, keeping tabs on the way Pension Wise is being carried out.Of this, £275,000 would be spent on staff. The start up costs in the first year for checking compliance in terms of staff would be £412,000.These figures are contained in a cost benefit analysis document that the FCA has produced.{desktop}{/desktop}{mobile}{/mobile}The figures above were what the FCA labelled the high end, with officials saying that the ongoing costs could be £263,000 at the low end and the one off cost could be as low as £375,000.The FCA said its "monitoring approach" will "combine a number of tools to establish appropriate baselines of compliance and assess providers' ongoing performance".FCA officials will:• collect and analyse monitoring data provided by providers on a regular basis• develop and carry out an ongoing self-assessment process with providers• visit and assess providers• carry out consumer research (e.g. mystery shopping, user experience)• carry out detailed reviews of specific issues (similar to the thematic supervision approach)• develop action plans and recommendations where necessary.The report stated: "The FCA will incur one-off costs in the first year of the guidance service of setting up these tools and establishing the relevant baselines."Ongoing costs will be incurred through the regular activities associated with the tools and more general activities such as internal reporting and governance and day to day interactions with the providers."The costs arise from junior and management staff time, it said, with the estimate that a team of between 3 and 4.5 full time equivalent staff will be required in the first year.The ongoing requirement will be between 2 and 3 full time staff per year.

Checking up on Pension Wise to cost FCA £400k every year

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