The Pensions Regulator (TPR) has warned members of eight defined benefit (DB) pension schemes, including J Sainsbury and Asda, about the possibility of being a target for pension transfers.
FTAdviser reported earlier this month that the watchdog, alongside the Financial Conduct Authority (FCA), are signposting members to The Pensions Advisory Service (Tpas) in cases where there may be speculation or uncertainty around a pension scheme’s future.
According to people familiar with the matter, the watchdog has now written specifically to trustees of the Lloyds Banking Group pension schemes, with similar concerns.
As first reported by FTAdviser sister newspaper Financial Times, the regulators also warned the trustees at J Sainsbury and Asda after the two supermarket chains announced a merger in April.
The first time the watchdog sent a letter detailing how members can get impartial objective information at Tpas was in the British Steel case.
According to the regulator’s submission to the Work and Pensions select committee inquiry on the defined benefit (DB) white paper, the watchdog has acted “to provide trustees with letters to send to their members, alerting them to the risks of transferring and giving practical information”.
The letter, seen by FTAdviser, said that, in most cases, transferring out of a DB pension scheme into a different type of pension arrangement is unlikely to be in the saver’s best interests.
It added: “You can’t change your mind once you’ve transferred out of the scheme, and if you are transferring your benefits to a defined contribution (DC) arrangement, then will be giving up a valuable level of predictability in your retirement income.
“It is important that you get guidance or advice before making a decision. Tpas offers free guidance and will help answer any questions you may have.”
TPR is also asking pension scheme trustees to keep track of the financial advisers used by members when they request a transfer value, and report them to the watchdog if any suspicions arise.
Lesley Titcomb, chief executive of TPR, said that trustees are now requested to “look out for when there is something unusual” in transfer requests.
She said: “Historically trustees haven't tracked which adviser is advising the member that has come for a transfer quote, we have asked them to track that.”
Justin King, certified financial planner at MFP Wealth Management, said: "It is a scary world for the uninformed. Tpas is your friend and guide and protector."
maria.espadinha@ft.com
