Stuart Price, partner and actuary at Quantum, discusses why there has been an increase in people transferring out of defined benefit pension schemes…
Stuart said: Over the past few years, there has been a notable increase in the number of people transferring out of their defined benefit pension schemes.
Why are people giving up this ‘guaranteed’ retirement income? There are numerous reasons why transferring out can seem like a good option, particularly in the wake of high-profile cases such as BHS that have seen members’ pension benefits severely reduced through no fault of their own.
Cases such as these can make the general public wary of defined benefit schemes and encourage them to ‘take their money and run’.
But what are people running to? By transferring a defined benefit entitlement to a defined contribution arrangement, individuals can access pension freedoms that were introduced in 2015 which are not available to defined benefit arrangements, such as being able to take all of their pension as a single lump sum or a series of lump sums.
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