Protecting defined benefit members from the pension vultures.

shutterstock_1038948316 large web

WEALTH at work, a leading provider of financial education, guidance and advice in the workplace is calling for more to be done to protect defined benefit members from the risks around pension transfers.

In 2017 defined benefit (DB) pensions hit the headlines and failures involving BHS, British Steel and Carillion brought member support under the spotlight.

The Work and Pensions Select Committee described a number of ‘dubious’ financial advisers as ‘vultures’. This followed much scrutiny of the closure of the British Steel Pension Scheme and transfer of pensions to alternative schemes, with much of the advice given to members being deemed unsuitable by the FCA. The FCA has since revoked or accepted the voluntary suspension of transfer advisory permissions from several firms and announced a data collecting exercise from firms holding pension transfer permissions.

Elsewhere ‘high’ transfer values are seeing other DB scheme members transferring to DC pensions, and inheriting the risks involved in managing pension savings and retirement income.

Jonathan Watts-Lay, Director, WEALTH at work comments; “The British Steel situation in particular has flagged a big gap for me; although  information was available including a helpline and website content, in the main members were left alone to find help despite the pensions regulator ‘urging’ the Trustees to talk to members about the importance of obtaining  financial advice.”

He adds; “But this doesn’t have to be the way. Employers and Trustees have access to professional advice from consultants and buying power and so are perfectly placed to facilitate access to a breadth of services including financial education, guidance and advice to help employees and members fully understand their pension scheme options, and the risks. This approach also comes with the benefit of having agreed pricing for services rather than leaving members to guess whether they are paying appropriate fees.”

Watts-Lay comments; “This service would ensure that any financial advice provided is by a firm who has been subject to thorough due diligence including ensuring robust compliance process checks – not only in complex DB cases, but as an everyday option. There is plenty of evidence that these services help members get better outcomes.”

He comments; “And whilst there are some employers and schemes doing this now – they are in the minority and it is time it was the norm. After all, being picked at by vultures is hardly a good member outcome.”

IMPORTANT – External links please read: Virus status

*Contents of links to external websites
Links to websites external to those of Wealth at Work Limited  (also referred to here as ‘we’, ‘us’, ‘our’ ‘ours’) will usually contain some content that is not written by us and over which we have no authority and which we do not endorse. Therefore please be aware that we do not accept responsibility for the content of any third party site(s) except content that is specifically attributed to us or our employees and where we are the authors of such content. Nor do we endorse any organisation or publication to which we link and make no representations about them.

Investment decisions
Please note that the content of this website including any external articles to which it links are not financial advice and must not be relied upon to make investment decisions.  Further, please note that investments can fall as well as rise and that if investing you may get back less than you originally invested.

Subscription only sites
Where we have been quoted in an article or we are the authors of an article held on a third party website we may provide a link to that site, even though it is a subscription only publication.  Please note that by doing so we are not advertising the subscription nor are we suggesting that you should subscribe. We are merely providing a link for those people who already have a subscription should they wish to read the article. If you do not have a subscription then often only the first lines of an article may be available to read. You should not rely on that limited content to form a view of what the whole article may say or conclude. Often a headline or an excerpt of an article are not representative of the article in full. Reading a part only and/or out of context may be misleading and must not be relied upon.