An important role employers play in Defined Benefit Pensions

22.04.2021
David Haughton
Financial Planning

Employers that push staff into making unsuitable defined benefit transfers should beware the “Financial Conduct Authority’s (FCA’s) gaze”, a director at the regulator warns.

Speaking at a webinar hosted by consultants Lane Clark and Peacock, FCA director of markets and wholesale policy Edwin Schooling Latter gave an update on how the watchdog views transfers.

In his remarks he touched on recently published guidance about the responsibilities facing employers and trustees.

The joint guidance from the Pensions Regulator and FCA was published in March 2021 with a focus on what trustees can do to help members without straying into advice or arranging investments.

Examples of what a business can do include offering signpost guidance, sharing factual information about pension options and recommending advisers.

“We want employers and trustees to feel able to help employees and their members. We believe it is better if the consumer’s pension journey is one that stays in a safe, well-lit space away from internet scams,” said Schooling Latter.

Ultimately, considering the possibilities and subsequent ramifications of transferring a Defined Benefit pension arrangement to your own personal arrangement is a very complex area of advice and should be left to the experts. If you are therefore looking to weigh up the pros, the cons and the possibilities, you should seek the advice of a qualified Independent Financial Adviser and here at Lovewell Blake Financial Planning, we have a team of specialists who are able to help.

What we don’t want is employers or trustees pushing employees and members out of the safe space because of an objective to de-risk a corporate balance sheet.

The role employers play in the pension arrangements of their employees has been under intense regulatory scrutiny since the fallout of the British Steel Pension Scheme scandal which, according to some reports estimated that of 7700 steelworkers who were transferred from the British Steel pension scheme, around 6000 were probably advised incorrectly.

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