The Association of Professional Pension Trustees (APPT) is calling for a member-focused approach to address the surge in deferred pension pots in response to the DWP consultation on member security and risk rebalancing.
APPT outlines the previous successes of employer-sponsored pension schemes and proposes evidence-based recommendations, among which two are new voluntary and automatic transfer criteria and a secure pension transfer network.
The purpose of auto-enrolment is to improve retirement savings outcomes by minimising the number of multiple pots following work changes.
APPT emphasises the positive effects of the AE pensions that the government implemented following the findings of the Commission report, as well as the crucial role that employer support plays in the prosperity of UK pension systems.
APPT says it is hoping to collaborate with the DWP and other stakeholders to develop tech-based solutions for efficient pension transfers.
APPT chair Harus Rai says: “APPT’s view is that a constructive and member-focused approach should be adopted to find a solution to the explosion of deferred pots. Amongst all the players, trustees are the party that focuses explicitly on member interests.
“As trustees, we believe that members are better off with fewer pots as they move from job to job during their careers. The continued proliferation of multiple pots under the current system undermines the retirement savings outcomes of auto enrolment.
“Solutions need to be evidence-based, built on new infrastructure which enables a secure pension transfer network. We’d like to work with the DWP and other bodies to develop new voluntary and automated pension transfer rules, using a technology-based solution to the rapid creation of new deferred pots each time employees change jobs.”
