Pensions minister Steve Webb has urged for a crackdown on the use of enhanced transfer values (ETVs) when employees move from final salary pensions to defined contribution schemes.
Webb, who met with industry representatives and The Pensions Regulator this week, is concerned about employers offering staff large cash lump sums or immediate increases to their pension pots to encourage them to transfer out of defined benefit (DB) pensions.
Neil Carberry, director for employment policy at the Confederation of British Industry (CBI), said: “The Pensions Regulator would be best bearing down on situations where it’s clear that transfer offers are not in a pension holder’s interests, or when either poor or no independent advice has been offered.
“Regulation of our pensions should both be proportionate and risk-based.
“But we must also be careful not to demonise the whole of this market. The deal many policyholders get from good ETV offers is often attractive.
“And we should not blame companies for managing their liabilities to ensure both a fair deal for pension scheme members and the growth we all want to see.”
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