DB trustees will be able to transfer surplus payments into a DC arrangement via a new solution offered through Aviva Master Trust.
This new option is aimed at both DB trustees and sponsoring employers, allowing them to use surplus funds to enhance DC benefits for members, while also giving employers tax-efficient access to capital and helping schemes progress towards wind-up.
Aviva says this new flexible solution offers a secure and compliant way to deploy surplus capital, and is available to both new and existing clients whose DB schemes are in surplus. Transferring surplus funds into DC arrangement will be subject to individual scheme rules.
Aviva adds that once the Pension Schemes Bill comes into law surplus transfers could become a more realistic options for schemes earlier than expected.
Aviva head of master trust development Geoff Marchment says: “Unlocking DB surplus can benefit employers, trustees and DC scheme members. Our new solution helps trustees and employers, supported by their advisers, to deliver better outcomes for members in a tax efficient way – demonstrating how the Aviva Master Trust continues to evolve to meet the changing pensions landscape.”
Aviva commercial director of bulk purchase annuities John Smitherman-Cairns, adds: “Where trustees have secured the funding needed to guarantee the benefits of DB scheme members, either through buy-out, buy-in or run-on, this forward-thinking solution allows trustees to re-deploy surplus funding to support the retirement plans of DC members.”
