The Pensions Regulator (TPR) has published under guidance today Wednesday 29th April 2020, that pension scheme trustees must send letters to Defined Benefit (DB) members looking to move their funds to a Defined Contribution (DC) scheme warning them that during Covid-19 it is unlikely to be in their best interest and asking members to consider their decision very carefully.
Whilst the markets are volatile and the uncertainty for businesses and personal finance companies, the TPR are concerned that DB members could be at risk at making hasty decisions.
Charles Counsell chief executive at TPR said “We need to protect savers and whilst the impact of Covid-19 is impacting everyone, we want DB members that have taken a lifetime building their pension pots, to seriously consider any transfer decisions we felt the need to write out to the members asking them to stop and think before transferring and provide them with free impartial guidance from The Pensions Advisory Service”.
It is not in most peoples best interests to transfer and give up their defined benefit or safeguarded rights pension guarantees anyway. This smacks of TPR yet again trying to protect the solvency of company pension schemes rather than what is in the best interests of an individual member. That said, anything that highlights the higher risk nature of transferring is no bad thing.