Ford Motor Company is planning to offer partial defined benefit transfers to members, it has revealed.
The new option will allow members to receive 50 per cent of their pension in the form of their secure DB income, and 50 per cent as a cash lump sum, allowing savers to make use of the pension freedoms.
The idea of partial transfers has gained traction in recent months following high demand for pension transfers from members, mixed with concerns members may be making the wrong decisions, or receiving bad advice, especially due to the British Steel Pension Scheme transfer scandal.
A recent survey of pension trustees at the XPS Pensions Group annual conference found that 75 per cent agreed that schemes should be offering them as a way of “taking advantage” of the pension freedoms “whilst ensuring their outcomes are protected”.
Ford said it was “very aware that the option for employees to take the full value of their pension as a cash lump sum was a big change to UK pensions”.
As a result of these changes it said it was “concerned”, along with the unions, of Ford employees being exposed to “significant risks”, such as making incorrect decisions, receiving bad advice, and running out of pension savings.
In response, Ford set up a joint working party with union representatives to understand the risks and identify solutions to help Ford employees.
“The working party agreed a few solutions to address these concerns. The partial transfer option is one of these solutions (the others were increased communications and an online and paper-based service - all to help educate employees).”
“This is currently going through final stages of implementation and we hope to implement soon,” Ford said.