PENSION REFORM 2014/15

Synopsis: The government has effectively increased the threshold at which regulated advice will be needed for defined benefit transfers.

In its Budget consultation document ‘Freedom and choice in pensions’, the government floated the idea of restricting transfers from defined benefit schemes to defined contribution arrangements. In its response the consultation, it proposed that it would ban transfers from unfunded defined benefit schemes to money purchase arrangements (because of the impact of an exodus on the public purse) and would require other transfers to be accompanied by advice from an FCA-regulated adviser.

For practical purposes, advice was only to be required if the value of all the member’s pensions exceeded £30,000. Lord Newby, in a debate on the Pension Schemes Bill in the House of Lords (27 January 2015) has now said that the advice will only be needed if the transfer value in question exceeds £30,000.

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