Thousands of savers could benefit from bulk DC pension transfers if member consent becomes no longer mandatory says Aegon.
Responding to the DWP call for evidence into bulk DC transfers, the provider says a new approach that does not require a member’s individual consent to a transfer but does protect members’ interests is required.
The DWP call for evidence wants suggestions as to how to ‘reduce unnecessary burdens whilst ensuring members are adequately protected’ and ‘allow providers of stakeholder pension schemes to transfer members to more modern and often lower cost schemes’. It comes as the DWP and FCA’s review of industry progress in remedying poor value legacy workplace pension schemes has raised concerns over providers deferring improvements where customers haven’t engaged and offered explicit agreement.
Aegon pensions director Steven Cameron says: “The DWP consultation is further proof that the Government wants to see individuals in older ‘legacy’ pension schemes moved responsibly, in bulk, to more modern pension arrangements. Modern pensions can benefit members through lower or simpler charges, digital engagement, stronger governance and better or wider investment and retirement options.
“As the DWP rightly calls out, if providers must gain specific consent from every member, bulk transfer are very difficult, which is why we need to look afresh at responsible approaches to bulk transfers without member consent, not only protecting but strengthening member interests.
“While the DWP is focussing on occupational and stakeholder pension schemes which they have responsibility for, those in older personal pension schemes can also benefit from moving to more modern arrangement. It’s important that there are consistent standards that work across trust and contract based pensions and that all parties including DWP, FCA and HMRC work together to make sure as many ‘legacy’ scheme members as possible can benefit from bulk transfers.
“In other industries most consumers now expect regular product upgrades to the latest technology, service and pricing. With pensions some of the longest term investments there are, and with low consumer engagement, it’s important that the industry works with Government to deliver a mass ‘pensions upgrade’.”