No Ban On Final Salary Pension Transfers

No Ban On Final Salary Pension Transfers.

In Budget 2014, the Chancellor announced a raft of changes to pensions with the introduction of flexible drawdown of pension funds for all from 2015.  Temporary measures were also put on place for tax year 2014-15 to allow flexible drawdown for all those who already had guaranteed pension income (including State pensions) of £12,000pa.

At the time, the Government recognised that many members of salary related defined benefit pensions may feel aggrieved and would transfer out of so called “gold plated” pensions to private pensions to access the same pension drawdown flexibility.  It said that it would consult on possibly banning final salary and career average salary defined benefit pensions transferring to private pensions.

The consultation period has finished and Government has confirmed that it will not ban the transfer out of defined benefit pensions.  They have added the proviso though that transfers out can only be done with highly qualified advice.

Comment

So the position is unchanged.  Defined benefit pension transfers are already only permitted:

• When the pension rules allow for example many unfunded public sector schemes such as the Civil Service Pension have no money in the pot, so there is no money to transfer out and therefore no transfers allowed
• Funded final salary schemes can only be transferred with regulated financial advice
• The financial advisers must hold a high level pensions qualification such as G60 Pensions Exam offered by the Chartered Insurance Institute
• The regulated financial adviser must have special permission from the regulator, the Financial Conduct Authority (FCA), to conduct specialist pension transfer work.

We see no change then.

For your own information, all financial advisers on this website have the required Advanced G60 Pensions qualification and the firm is authorised by the FCA to conduct specialist pension transfer work.