Articles - Preventing Dormancy and Benefitting Communities

In the April 2022 edition of Actuarial Post (Pensions Pillar: Pension Dashboards Post-Consultation, pp16-17), my colleague Dale Critchley, Policy Manager at Aviva reflected on the development of the pension dashboards and the consultations that have recently taken place. The Financial Conduct Authority (FCA) consultation that covers the member data that occupational pension schemes will be obliged to link to pension dashboards could present an opportunity to ‘find data’ i.e. fill in gaps in policyholders’ personal details to avoid policies becoming dormant.

 By Kirsty Cooper, Group General Counsel and Company Secretary, Aviva plc & Industry Champion, Dormant Assets Expansion Board

 This development aligns closely with another important new opportunity that has emerged this year, namely the Dormant Assets Act 2022. The Act expands the existing Dormant Assets Scheme to new sectors, including pensions. This represents a landmark opportunity to harness the proceeds of policies that cannot be reunited with their owners to benefit social and community initiatives that complement the company’s environmental, social and governance (ESG) agenda.

 Unlocking dormant assets for social and community benefit
 The government-backed Dormant Assets Scheme has been established for more than a decade, and enables banks and building societies to transfer dormant accounts to Reclaim Fund Ltd (RFL), a not-for-profit, FCA-regulated organisation. RFL invests these funds to cover future reclaims, and transfers the surplus to initiatives tackling issues such as homelessness and youth unemployment.
 By end 2021, £1.6 billion had been transferred to RFL, and £800m to good causes. In 2021 alone, for example, Youth Futures, the newest dormant assets organisation, launched a £6.1m Connected Futures Fund to improve youth employment and skills delivery in the UK’s most vulnerable communities, and allocated £20.2m to 148 not-for-profit organisations that provided employment support to nearly 18,000 young people.
 Acting responsibly towards policyholders and wider communities
 In 2016, I was first appointed as a Commissioner for the Cabinet Office’s Dormant Assets Commission. The Commission was tasked with identifying new dormant asset sectors that could be included in the existing Dormant Asset Scheme, which has applied only to dormant bank accounts to date. The Dormant Assets Act 2002 is the result of this collaboration, and it has been a privilege to see this journey from end-to-end as Industry Champion for the Dormant Assets Expansion Board which has created the framework to facilitate transfers to RFL.

 Under the Act, new sectors, including pensions, can transfer the proceeds of dormant life retirement income policies to RFL after appropriate efforts at tracing, verification and reunification (TVR). It is hoped that TVR will become easier, and with greater success rates, as a result of the introduction of the pensions dashboard. Even if initial TVR efforts are unsuccessful, policyholders or their beneficiaries are guaranteed the ability to reclaim the value of their policies at any time.

 The Commission estimated that there are around £2.1 billion in dormant assets in the insurance and pensions sector in the UK, of which more than half could be reunited with their owners through enhanced TVR. With almost a billion that could be transferred to RFL, however, the Commission calculated that £575 million could be available to help fund social and community initiatives.

 The final piece in the pensions dormancy jigsaw
 Unlike the pension dashboards, the Dormant Assets Scheme is voluntary; however, it effectively represents the vital final piece in the government’s aim to keep policyholders connected with their assets and prevent dormancy. Where this is not possible, these funds can be used for good, whilst guaranteeing policyholders’ and beneficiaries’ rights in perpetuity. RFL will be accepting transfers into the new sectors in early 2023. Please feel free to contact me for further information on how to participate, or RFL at


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