View more on these topics

Pensions minister: Why DC consolidation needs to be simpler

As minister for pensions and financial inclusion, I understand how important it is to promote the business community and support job creators.

But I am also acutely aware the government needs to find the right balance between encouraging business and protecting people who are working hard for their families.

In pensions, this balance is especially important as they are our collective investment in our futures.

In order to balance the needs of businesses and employees, we have introduced new measures that will help firms move their people into more efficient pension schemes.

Allowing businesses to close occupational defined contribution schemes more easily will reduce burdens on employers and potentially free up costs for reinvestment. This will result in better returns for those who have invested in the pension scheme, leading to better outcomes in retirement.

Aon Hewitt’s 2017 survey of DC schemes found a third of those running their own trust-based schemes expected to move to master trusts in the next five years.

With many DC schemes keen to close, businesses are looking to reduce sponsoring employer burdens or take advantage of economies of scale to benefit their members.

Previously, transferring groups of members out of occupational DC schemes required trustees to obtain either individual consent or the certification of the new, proposed scheme via a complex actuarial process.

Ian McKenna: The shape of things to come for pensions consolidation

The legislation introduced this year has removed these ineffective, time-consuming and costly barriers. It has introduced the freedom to use an independent adviser to assess the proposed scheme, and in future to allow transfers to authorised master trusts without a legal requirement for additional advice.

The simplifications will assist in the ongoing consolidation of the DC market.

These regulations recognise that the pensions industry is changing, and that rules need to evolve and develop alongside that. The changes will ensure employers are better placed to decide how best to support the retirement plans of their employees, without the worry of unnecessary and costly burdens getting in the way.

Pension scheme members retain the protection of the charge cap, which they will carry into the new scheme. Additional protection is afforded by the need for independent advice.

Balancing the protections of employers with promoting business is crucial to the long-term efficiency of pension schemes. People are living longer, healthier lives, and the pensions market is evolving to meet these new demands. This government is committed to maintaining this balance.

Guy Opperman is minister for pensions and financial inclusion


The firms seeing the benefits of adviser academies

Several advice firms and providers have reported progress in their adviser academies this year with growing numbers in the programmes and success with exams. deVere Group announced the expansion of its graduate programme in February, calling it a bid to plug “the impending financial adviser gap”. A spokesman from the group says the training of […]

Exclusive: Intelliflo partners with Selectapension on switching tool

Adviser back-office provider Intelliflo has signed a new data partnership with pension transfer specialist Selectapension. The deal is designed to drive greater choice for customers using both companies. From the beginning of September, Intelliflo’s IO Store will include a Selectapension app, allwing current Selectapension customers to move and store all their existing client reports on Intelliflo’s […]

Nigeria cover image - thumbnail

White paper — Nigeria International Insights

Jelf Employee Benefits closely examines healthcare provision and challenges within Nigeria. This will be of particular interest to HR decision makers with employees based in Nigeria, and assesses the environment, risks, facilities and safeguards that are relevant to organisations that are actively deploying expatriate staff in this location.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm