The Government is launching a full-scale investigation into enhanced transfer value exercises next month in an effort to stamp out bad practice.
Money Marketing understands the Department for Work and Pensions will set up a working group charged with delivering a new framework for ETVs.
The pensions industry, Government and The Pensions Regulator will all be represented.
This follows warnings from pensions minister Steve Webb that “cash bungs” are being offered to induce members to ditch defined-benefit pensions.
Speaking at the Liberal Democrat party conference in Birmingham last week, Webb said: “Firms have every right to talk to workers about getting their pension rights in a different way but we need to make sure people are making well-informed decisions and not losing out on valuable pension rights.”
Towers Watson senior consultant David Robbins says: “This is an area where the Government needs to proceed with caution. There can be transactions where both parties can gain from an ETV so a blanket ban would not have been a good idea. It is good to see the DWP taking a measured approach.”