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Excessive regulation alarms Aon

Aon Consulting is warning that unnecessary regulation around DB transfers could sound the death knell for a valuable option for scheme members.

Responding to calls from some industry players for a fixed structure for offering transfers, Paul McGlone, principal and actuary says: “Regulation and guidance on transfers between DB and DC schemes is something that is already closely monitored by bodies such as the FSA and The Pensions Regulator. Calls for further regulation in this area could actually result in a situation where scheme members are worse off because of increased bureaucracy and greater costs, leading to companies finding transfers less palatable to offer. All pension schemes have a statutory duty to offer transfer values to members, and to advertise that fact to members. Trustees consider carefully what level of transfer they can reasonably offer, and for those companies that want to offer members an option that is over and above what the Trustees can offer, they are providing members with additional choice.

“The ultimate losers in this situation would be the members of DB schemes who would find a valuable option no longer available.”

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