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NAPF call for greater OPP lock-in powers

The National Association of Pension Funds has come under fire from

IFAs and providers for calling for grea-ter power to lock

occupational pension members into their scheme.

The NAPF has asked the Department for Work and Pensions to give

schemes the right to refuse cash-equivalent transfer values even

though proposed new rules allow trustees to reduce valuations to

reflect scheme underfunding.

Advisers say individuals should be able to place their funds where

they want, provided that a thorough transfer advice process has been

followed.

But the NAPF wants the right to stop people taking their funds out

because it fears that, in years to come, transferees will try to

reclaim the shortfall they gave up if funds bounce back out of

deficit.

The DWP says new CETV rules will be out “soon”. The rules are

expected to allow trustees to protect members who remain in the

sch-eme by reducing transfers in proportion with scheme underfunding.

NAPF director of benefits David Astley says: “If markets bounce back,

you will get people who took reduced benefits coming back and wanting

the balance.”

Mercer senior consultant Wendy Beaver says: “What the NAPF is calling

for is unnecessary powers. Is this necessary when the power is

already there to extend the deadline?”

Scottish Equitable pen-sions development director Stewart Ritchie

says: “If a member sees long-term problems with the scheme&#39s funding,

he should have the right to decide whether to take the bird in the

hand rather than the two in the bush.”

Millfield pensions specialist Graham Duckett says: “This is almost a

human rights issue. If people have value in an investment, they

should have the freedom to deal with it as they think best.”

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