The DWP, FCA and HMRC need to collaborate to make sure as many ‘legacy’ scheme members as possible can benefit from bulk transfers, says Aegon’s pensions director Steven Cameron.
This comes as the DWP launched a call for evidence into improving rules around a company or scheme provider wanting to transfer members in defined contribution pension schemes ‘in bulk’ to a more modern scheme without asking for their specific individual consent.
The DWP aims to ‘reduce unnecessary burdens whilst ensuring members are adequately protected’ and ‘allow providers of stakeholder pension schemes to transfer members to more modern and often lower cost schemes’.
Mr Cameron said: “In other industries most consumers now expect regular product upgrades to the latest technology, service and pricing. With pensions some of the longest term investments there are, and with low consumer engagement, it’s important that the industry works with Government to deliver a mass ‘pensions upgrade’.”
The call for evidence comes hot on the heels of the DWP and FCA review of industry progress with remedying poor value legacy workplace pension schemes, which raised concerns over providers deferring improvements where customers haven’t engaged and offered explicit agreement.
Mr Cameron said: “The DWP consultation is further proof that the Government wants to see individuals in older ‘legacy’ pension schemes moved responsibly, in bulk, to more modern pension arrangements. Modern pensions can benefit members through lower or simpler charges, digital engagement, stronger governance and better or wider investment and retirement options.
“As the DWP rightly calls out, if providers must gain specific consent from every member, bulk transfer are very difficult, which is why we need to look afresh at responsible approaches to bulk transfers without member consent, not only protecting but strengthening member interests.”
He said: “It’s important that there are consistent standards that work across trust and contract based pensions and that all parties including DWP, FCA and HMRC work together to make sure as many ‘legacy’ scheme members as possible can benefit from bulk transfers.”