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Consolidation: Simplify benefits to aid transfers, say experts

Feb 04, 2019 - Investment & Pensions Europe

The UK government has not gone far enough to protect members' interests in its proposed rules for commercial defined benefit (DB) consolidators, industry organisations have said.

The UK government's consultation on the proposed rulebook for consolidators closed on Friday. Responses were broadly supportive of the government's planned approach, but warned that more attention needed to be given to the complex nature of some accrued benefits when transferring from one provider to another.

Law firm ARC Pensions Law warned that the Department for Work and Pensions' (DWP) plan had "significant gaps in member protection" as it had not fully explored the varying nature of accrued benefits within individual schemes. UK DB schemes often have separate tranches with differing benefit structures depending on legacy rules on inflation linking, retirement age, or accrual rate...