Pensions - Articles - Government and regulators must stop pension transfers limbo


According to Royal London’s Policy Director, Steve Webb the DWP, the FCA and the Pensions Regulator need to act quickly to clear up confusion in the pensions market following the recent Lloyds Bank case over Guaranteed Minimum Pensions (GMPs),

 The ruling in the Lloyds Bank case means that workers who were building up GMPs in their company pension scheme between 1990 and 1997 could have their pensions increased to deal with any inequalities between men and women. But exactly how and when this should be done, and whether people who have already transferred out could be affected, is not clear from the ruling.

 In response, some pension schemes and administrators are concerned that they should not process transfers until equalisation has taken place, and some have even put a temporary hold on transfers. Unless the authorities act swiftly, this could leave many people unable to go ahead with a transfer until matters are resolved. Schemes are understood to be concerned that if they carry out transfers based on existing valuations they may later be found to have deprived members of the potential uplift from GMP equalisation.

 Commenting, Steve Webb, Director of Policy at Royal London said: ‘The recent Lloyds Bank case has made clear that pension schemes need to tackle inequalities in their schemes, but many questions remain unanswered. It is vital that pension savers who are considering a transfer out are not left in limbo while the industry works out what exactly this ruling means. The pensions industry and pension savers urgently need to hear from the authorities what they should do now with regard to pension scheme valuations and pension transfers. With some pension transfers already on hold, a public statement is urgently needed’.

   

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