Few issues divide the pensions’ world like transfers from defined benefit (DB) to defined contribution (DC) schemes. To help DB pension scheme trustees understand what the law requires of them and what good practice might look like, we’ve joined forces with leading pensions lawyers Eversheds Sutherland to create a new policy paper.
How much should you tell them? A discussion paper for DB plan trustees
We consider whether trustees should be offering transfer values as part of routine communications, regardless of whether members have asked for them. And what support trustees and employers should offer to members that request a transfer value.
The paper looks at the case for trustees being largely passive and reactive when it comes to transfers, as:
We then look at the reasons why trustees may want to go further than the legal minimum:
The paper concludes that while there’s no single right answer for all schemes, trustees should be aware that there are legal risks to both approaches. They should recognise that pensions freedoms have changed the pensions landscape in a way that they need to take account of.
Hundreds of thousands of people have transferred out of their company pension in the last few years having taken impartial financial advice. Trustees need to engage fully in this process, and shouldn’t make assumptions about what’s right for individual members. Instead they should make sure their members are well informed about their options and equipped to draw on good quality advice before making the decision that’s right for them.
You can read the full policy paper here.