The DWP paper focusses on employers consolidating more than one occupational pension scheme or transferring from trust to master trust. It also considers relaxing the restrictions on bulk transfers of stakeholder pension scheme members. Aegon is calling on the DWP to broaden the scope of its review to pave the way for many more members to benefit from bulk transfers without the need for individual consent.
Steven Cameron, Pensions Director at Aegon said: “We’re pleased that DWP is exploring how to improve approaches to bulk transfers of DC pensions where there is clear evidence that members will be better off, without the need for members to give their express permission. There is now a ‘new generation’ of modern pensions which compared with ‘legacy’ schemes, offer members the benefits of lower or simpler charges, digital engagement, stronger governance, better or wider investment choice and ready access to the new pension freedoms.
“As the DWP correctly points out, providers, schemes or employers often find it hard to get all members to respond to communications on pensions. This means if specific consent is first required from every member, bulk transfers are very difficult to achieve, even where it is clear members will benefit. This is why we support looking afresh at responsible approaches which notify the member of the proposed change but which can be implemented without the need for members to explicitly consent.
“The scenarios where members could benefit from bulk transfers go much wider than those considered in the paper and we are urging the DWP, working with other interested parties, to look broader and bolder. This should include group personal pensions as well as trust-based schemes.
“In other industries, consumers now expect regular product upgrades to the latest technology, service and pricing. Pensions are some of the longest term investments there are, and with low consumer engagement, it is important that the industry works with Government to deliver ‘pensions upgrades’ where clearly beneficial.”
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