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DB transfer numbers hit 80,000 in one year

FOI reveals extent of transfers out of defined benefit schemes over the last year

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The Pensions Regulator has estimated that a total of 80,000 transfers were made from defined benefit pension schemes over the last year.

Following a Freedom of Information request, published earlier this week, TPR says between 1 April 2016 and 31 March 2017 DB schemes reported 67,700 transfers out.

But it says because not all schemes reported how many transfers they carried out, it estimates the true figure is more like 80,000.

TPR says it does not hold information to compare with previous years.

According to figures from the Office for National Statistics, active membership of open private sector DB schemes stood at 600,000 in 2015, less than half the 1.4 million in 2006.

This compares to 1.6 million actives overall in 2016, according to the Pension Protection Fund.

Money Marketing reported last week on the level of mounting concern around the demand for DB transfer advice and worries that problems are building up for the future.

Separate figures published last week from the City of London Police show losses from pension scams hit a record high in March of £8.6m.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Quick bit of maths. I like maths for a bit of perspective.

    Nearly every worker over the age of 40 will have one if not two deferred benefits in DB schemes. Let’s call it one each.

    700,000 people in each year of age. 70% work and an average of 22 years between 40 and normal retirement.

    That is a guesstimate of 11 million bits of DB benefit. CETVs out of 80,000 in a year would take 137 years to transfer them all out.

    Not what you’d call an avalanche.

    Even if half of these bits of benefit are in the protected public sector, it’s still not a deluge.

  2. Hasn’t anybody yet twigged? For the Private Sector DB is just an open chequebook and I would guess that practically all firms that still have on would dearly like to ditch it.

    In the case of the Public Sector; in private the Government and Local Govt. would dearly love to be able to control the cost, but worries about backlash and strikes.

    So good old George Osborne hit on a clever solution – Pension Freedom. So many DB members are tempted to run for the exit and trash the cash (as are DC members) that is helping the employers and of course the Revenue, as well as a bonanza for advisers and fund managers.

    A stoke of genius or what? But the poor old member is being stuffed.

    • Duncan Gafney 31st May 2017 at 3:40 pm

      Except that pension freedom does not apply to public sector unfunded DB schemes (i.e the vast majority).

      Try asking for a CETV from the NHS scheme…

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