The Department for Work and Pensions (DWP) has launched a consultation on the draft regulations for bulk defined contribution (DC) transfers without member consent.
The current rules require an actuarial certificate relating to members' rights in the receiving scheme, as well as the two schemes to be related in some way.
In the paper the DWP explained respondents to the initial consultation were "strongly of the opinion" that the current legislation needs to change in order to be "more relevant" to DC occupational schemes.
It added there was support for its proposals, which have been put into the draft Occupational Pension Schemes (Preservation of Benefits) (Amendment) Regulations 2018.
The DWP wants to remove the scheme relationship condition for these transfers and maintain charge cap protections for those transferred without consent.
It also wants to remove the requirement to obtain an actuarial certificate for bulk transfers of DC pensions without member consent (DC to DC) with an alternative test and new member protections.
These additional protections take several forms.
Where the transfer is to a scheme authorised under the master trust regime, trustees will have their fiduciary duties to act in the best interests of members.
If the transfer is not into an authorised scheme, the trustees of the ceding scheme will also need to review the receiving scheme, under their responsibilities in trust law.
This will be with the assistance of appropriate guidance from The Pensions Regulator or the DWP.
The DWP also thinks members protected by the automatic enrolment default fund charge cap in the ceding scheme should continue to apply to the scheme they have transferred to.
In the paper the DWP said: "We believe these three proposals will help improve the process for transferring members without consent, while still protecting members. Member protection will be maintained because trustees will have a fiduciary duty to act in the members' interests. In the context of a bulk transfer the trustees will need to consider two elements of what is in the members' interests."
The consultation runs until 30 November.
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