Pensions - Articles - ACA on speculation over ban on private sector DB transfers

 ACA Chairman, Bob Scott said: “There is a very real danger that speculation about a ban on transfers could cause a rush for the door while stocks last mentality by private sector scheme members who may be concerned about the security of their pensions, especially given the regular reports on ‘growing deficits’.

 “We don't see a blanket ban on transfers as the answer. Many schemes may well be happy to see members take transfer values that reflect RPI indexation, always remembering that DB scheme members must take independent advice before making a transfer decision. And if a scheme is concerned that paying transfers at that level would jeopardise funding, and hence other members’ prospective benefits, there are mechanisms under current legislation to reduce transfer values where underfunding is judged to be a problem.

 “A blanket ban could also lock some members into schemes where there is a real possibility that targeted benefit will not be forthcoming and it would seem very wrong that in such cases members, particularly those with long service, should be prevented from protecting their pension prospects by way of a transfer ban.”