27 October 2011
Pensions minister Steve Webb warned at the NAPF conference that
the government will legislate against enhanced transfer values and
pension increase exchange exercises if the industry fails to raise
standards in the next 12 months.
The minister said that the prevalence of incentive exerciess
'feels a bit like a closing down sale'.
He confirmed that the government is seeking legal advice on
whether cash incentive payments can be banned.
Pension increase exchange exercises involve the member giving up
future increases in their pension for a one-off uplift in their
payments. An employer undertaking an enhanced transfer value
exercise will offer employees an enhancement or incentive to
encourage them to switch from a defined benefit to a defined
contribution scheme.
