UK. Pension transfer market needs regulation, says industry
Ministers are facing calls to give powers to regulators to supervise the corporate pension transfer market after claims that companies are pressuring employees to quit their valuable retirement schemes.
Senior figures in the pension industry said a voluntary code of practice that is meant to prevent abuses by employers was no longer working. The concerns centre on how employers have the ability to initiate exercises under which workers who are members of their defined benefit pension schemes can swap their guaranteed future retirement income for a cash lump sum today.
The exercises involve employers providing workers with special financial incentives to transfer out of the schemes.
The Pensions Regulator does not have direct oversight of the incentive-based exercises, reflecting how employers are meant to comply with the voluntary code of good practice that was put in place in 2012.
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