Following a three month consultation, the Government has set out its proposals on ensuring early exit charges and the process for transferring benefits between pension schemes do not deter people from making use of the new pension freedoms.
In relation to transfers, the Government is of the view that there is scope to improve transfer times from trust-based schemes. To this end, the Pensions Regulator will be working with the pensions industry over the coming months to draw up best practice guidance to help the process. New reporting requirements, potentially including performance against benchmarks and targets, are also to be introduced.
On early exit charges, while these are not viewed as a significant issue for trust-based schemes, the Government is committed to ensuring similar protections apply to members of all schemes and has asked the FCA and the Pensions Regulator to work together in designing an early exit charge cap.