Employers will be required to fund independent regulated financial advice for some savers transferring out of defined benefit pension schemes, Chancellor George Osborne has announced.
The Government will set out details of its pension reform agenda later today, part of which is a requirement for regulated financial advice before savers move from a DB scheme to a DC scheme.
In a ministerial statement released this morning, Osborne says: “The Government intends to make it a statutory requirement on the transferring scheme for all individuals who are considering transferring out of a defined benefit scheme to take advice, from a professional financial adviser who is independent of the defined benefit scheme and authorized by the Financial Conduct Authority, before transferring.
“In most cases the individual pension member will need to pay for the financial advice. However, the responsibility for paying for the financial advice will fall on the employer if the transfer is from defined benefit to defined contribution schemes within the same scheme, or as a result of an employer led incentive exercise.”
The requirement for advice ahead of transfer will not apply to pots worth less than £30,000.