Sixty second summary
Simplifying DC-to-DC bulk transfers
31 Oct 2017 - Estimated reading time: 1 Minute
A long overdue consultation:
The DWP has published, for consultation purposes, legislation that would remove some legal hurdles that hinder DC to DC transfers without member consent from one occupational money purchase scheme to another.
It’s been quite clear that prevailing requirements are not suited to 21st Century DC to DC change; they are very much at odds with the current pension landscape and direction of travel, an unnecessary hangover (albeit well intended) from the DB world. Where a change is straightforward, technical actuarial input isn’t necessary; it adds cost and the ambiguity of ensuring that members are ‘…broadly no worse off…’ leaves many scratching their heads.
It’s imperative that members' interests remain protected and are at the heart of decision making. Principles-based guidance will be of value and would foster consistency but, at the same time, would allow trustees the freedom to focus on their members’ needs. Although the move to a Master Trust is largely an employer-driven exercise, it’s clear to see that collaboration between the employer and trustees will become ever more critical.