UK. Pensions: don’t cash out of defined benefits, warns regulator
Pension schemes are being warned they may be being too generous when offering cash lump sums to people considering transferring out of their gold-plated deals.
A letter sent by the Pensions Regulator to defined benefit (DB) pension schemes suggests that trustees think about whether they should cut the amounts on offer for workers leaving the pension scheme.
The letter has been sent to 14 schemes where the regulator is aware there has been a particular increase in transfer requests from members. The regulator is not calling on all schemes to consider cutting transfer values.
DB schemes are often described as gold-plated because they promise people a certain level of income when they retire, such as final salary pensions.
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