The industry has welcomed the Department for Work and Pensions’ consultation on defined contribution bulk transfers, which has proposed to make it easier for schemes to carry out the transactions without member consent.

The call for evidence entitled Bulk transfers of defined contribution pensions without member consent, closed yesterday.

The DWP said it aims to "reduce unnecessary burdens whilst ensuring members are adequately protected" and enable stakeholder pension scheme providers to "transfer members to more modern and often lower cost schemes." Under current law schemes are able to make a bulk transfer of members' pensions without their permission, providing they meet certain conditions that aim to protect members.

Sackers partner and head of DC Helen Ball noted that things have changed since 1991, when the original rules were written for DC bulk transfers.

“There are now other ways to ensure that transferring members end up in a good quality scheme - for example, the requirement for DC schemes to meet minimum legal standards, and the Pension Schemes Bill authorisation process for master trusts.

“In light of these, we do not see any need to retain many of the old barriers to transfers, such as the requirement for an actuarial certificate, as long as clear guidance and good practice can be developed in their place.”

In addition, Aegon pensions director Steven Cameron said: “We’re pleased that DWP is exploring how to improve approaches to bulk transfers of DC pensions where there is clear evidence that members will be better off, without the need for members to give their express permission. There is now a ‘new generation’ of modern pensions, which compared with ‘legacy’ schemes, offer members the benefits of lower or simpler charges, digital engagement, stronger governance, better or wider investment choice and ready access to the new pension freedoms.

“As the DWP correctly points out, providers, schemes or employers often find it hard to get all members to respond to communications on pensions. This means if specific consent is first required from every member, bulk transfers are very difficult to achieve, even where it is clear members will benefit. This is why we support looking afresh at responsible approaches which notify the member of the proposed change but which can be implemented without the need for members to explicitly consent.

“The scenarios where members could benefit from bulk transfers go much wider than those considered in the paper and we are urging the DWP, working with other interested parties, to look broader and bolder. This should include group personal pensions as well as trust-based schemes.”

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