WEALTH at work is calling for more to be done to protect employees and members from the risks around defined benefit (DB) pension transfers. Jonathan Watts-Lay, Director, WEALTH at work comments;
“The British Steel situation has flagged a big gap for me. Too many individuals are being left to find help when considering transferring their DB pension. From this we have witnessed the ‘factory gating’ activity of unscrupulous advisers with much of the advice given to transfer deemed unsuitable by the FCA.
To prevent this situation, schemes and employers should source reputable firms to deliver financial guidance and regulated advice for their employees and members. This would ensure that any advice provided is by a firm who has been subject to thorough due diligence including ensuring robust compliance processes, as well as agreeing consistent and fair pricing. I believe this would make the whole process far more robust.”
He continues; “As well as this, many more schemes should allow partial transfers within their DB scheme as about only 15% offer it now. Not only would this offer greater risk management but it would also provide an ideal option and middle ground for members torn between sticking with a guaranteed income and transferring all of their benefits. In other words, partial transfers could help members avoid the cliff edge of total transfer or no transfer.”