UK - A concession announced in yesterday's Budget which will allow small pension pots to be converted into cash has been widely welcomed.
The trivial commutation concession means pension savings below £2,000 in occupational schemes can be converted into cash, irrespective of the benefits a member may have in another scheme.
Currently, members can only convert small pension pots into cash if their benefits across all schemes are less then £16,000.
Jane Beverley, head of research at Punter Southall, said this meant defined benefit schemes had to pay out tiny amounts from the pension scheme each year.
She said: "You could be paying out a pension of £2.20, or something like that, per annum.
"That is obviously a huge expense to administer in comparison to the [value] of the pension. It would be much easier if you could convert that to cash."
The National Association of Pension Funds had been active in lobbying on the issue. NAPF chief executive Joanne Segars said: "While we would have liked the government to allow a higher limit than £2,000, this measure will still be enormously popular with administrators and trustees.
"Schemes will benefit from not only the simplified processing of what will now be a stand-alone exercise, but also the saving of the disproportionate costs involved in paying very small pensions."
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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