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Nest report urges Govt to allow transfers in and out of scheme

Government and regulators must review the issue of pension transfers “as a matter of urgency” to allow Nest to receive in and pay out transfers by 2017.

The recommendation, laid out in the ’Making automatic enrolment work’ review, follows confirmation that the restriction on the movement of benefits into and out of Nest would remain “in order to focus the scheme on its target market”. Under current proposals, the Secretary of State is required to review the policy in 2017.

The document says: “Facilitating transfers is, in our opinion, critical to the success of the reforms. Our view is that, as pension saving in defined contribution schemes becomes the norm, so should moving and consolidating pensions saving alongside changes in employment.”

It continues: “We recommend that Government undertakes a further review, in advance of the 2017 review of the restriction on transfers for Nest, to consider how transfers across the pensions industry can be made easier, so that individuals are better able to consolidate their pension savings as they changer employment over their working life.”

Legal & General pensions strategy director Adrian Boulding says: “The issue of transfers is absolutely vital. We don’t see any reason why you shouldn’t be able to pick up your pension and take it with you.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. What concerns me here is more to do with HOW the funds inside NEST are invested. I would be appalled if NEST money is used to finance short term government debt, and the more that transfers are allowed in, the greater the the scope of the gravy train of money the government can borrow

    This is the discussion that should be taking place between the government and the NEST trustees, but I have no illusions here. NEST money, some of it, will be used to finance government debt thus squeeing the investment returns that the NEST members will be able to enjoy in their pension fund. Squeeze too much and the members will rebel and then transfer out.

  2. Jennifer Nicholls 27th October 2010 at 5:02 pm

    This govt is so badly advised. There are going to mess everything up and leave people worse off all round. Of course transfers are critical. I can’t believe this is only being discussed now. God help us all.

  3. Of course they dont want to allow transfers. If people saw the impact of charges in early years there would be a scandal (remember why stakeholder mono charging was introduced in the first place).

    To allow transfers would show how expensive NEST really is to run.

  4. absolutely right Sean

  5. Pension transfers into NEST? So who’ll be providing the advice as to whether or not the transfer is likely to be advantageous? Who’ll be responsible if the advice is found subsequentkly to have been unsound? What about GAR’s? Comparison of charges? Critical Yield analysis? Comparison of fund choice? Possible loss of WoP cover? Transfers from DB schemes?

    Shopuld be a piece of cake ~ see your local CAB. All staff guaranteed to be highly qualified to QCF Level 6 or higher!

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