Small DC pension pots: new framework for automatic transfer

Wednesday, November 21, 2012

Following a consultation exercise, the Government plans to introduce legislation providing for the automatic transfer of defined contribution (“DC”) pension pots up to a limit yet to be decided, but likely to be between £2,000 and £20,000.

Individuals will not have to obtain financial advice before a transfer and will have the right to opt out. Short service refunds from DC occupational schemes will be abolished, but “micro-pots” can still be commuted into a lump sum, up to a limit yet to be decided.

The new framework will only apply to automatic enrolment schemes and so will not cover pension pots accrued to date or pots that arise where an individual is enrolled under his employment contract outside the automatic enrolment regime. The proposals are unlikely to come into effect until 2015/16 at the earliest.

The training session was very good – pitched just right in terms of our knowledge levels.

Trustee - Pension Scheme

Current News

Cohabitee wins right to pension

The Supreme Court has ruled that a nomination requirement relating to the payment of a survivor’s pension under a public sector pension scheme discriminated against cohabiting unmarried couples and should be disapplied.


Reversing Trustee Decisions

Trustees have on occasion relied on the “Hastings Bass” rule to unwind decisions that subsequently transpire to have unintended consequences. The scope to do so has been narrowed by the recent Supreme Court judgments in the jointly heard cases of Futter and another v HMRC and Pitt and another v HMRC.


EU Solvency Rules dropped

The European Commission has announced that it is dropping its plans for a new funding regime for pension schemes.


Pensions for Mortgages

Nick Clegg announces a new government idea to allow parents to use their pensions to help children onto the property ladder.