Statement concerning guidance on transfers from DB to DC schemes
Thursday 12 February 2015
The Pensions Regulator today published consultation guidance for trustees of defined benefit (DB) schemes on member requests for transfers from DB to defined contribution (DC) schemes.
The regulator’s interim chief executive Stephen Soper said:
“In the context of the new flexibilities, the first step for many members will be seeking a transfer of their safeguarded DB benefits to a DC scheme, enabling them to access their benefits flexibly.
“DB trustees may experience an increase in the number of requests for transfers and transfer quotes as members consider their options. We have therefore produced this guidance to assist DB trustees to manage transfer requests and their impact.”
The guidance aims to:
- help trustees ensure they have appropriate processes in place to manage transfer requests
- prompt trustees to consider the impact of transfer values as part of an integrated approach to risk management of their scheme
- require trustees to provide clear information for members so that they can get independent advice on the best option for them
Stephen Soper added:
"The regulator believes that for most members, it is still highly likely in current conditions to be in their best financial interests to remain in their DB scheme. However members' personal circumstances may mean they wish to consider the other options open to them.
“The provision of clear, timely information from trustees and the use of independent regulated financial advice will enable members to make informed decisions that suit their personal aims and circumstances.
“We will be working closely with the FCA as the advice regime develops, and producing guidance for trustees considering member requests at all points in their journey, for example decumulation options, to ensure those decisions are also well informed.
“We would like to hear the views of the industry on our guidance so we have launched a consultation which ends on 17 March.”
The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the employer’s plans for sustainable growth (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
Matt Adams 01273 662086