UK Industry Group Publishes Code of Good Practice on Incentive Exercises
08 June 2012 (PLANSPONSOREurope.com) - A group of UK pension industry bodies and stakeholders have banded together to launch A Code of Good Practice on Incentivised Transfer Exercises (ITE).
The Code, developed in response to a call by Pensions Minister Steve Webb to improve the standard of ITEs, aims to improve the standard of ITEs and improve the protection of pension scheme members taking part in ITEs.
Joanne Segars, Chief Executive of the NAPF, adds: “This code of practice will help to ensure people take the right decisions for their retirement. The industry has worked together to take this action and we think it will help protect savers and pensioners.
“This code sets a clear and fair standard. The NAPF strongly supports it and we will help to monitor compliance.
“This is a code of practice, not a detailed and prescriptive handbook. It is crucial that everyone complies with the spirit of the code, not just with its specific recommendations. The industry must also realise that if the code doesn’t work then regulation is likely to be the next step – and that is something it should try to avoid.”
Minister for Pensions, Steve Webb, says: “Whilst it is understandable that firms need to manage their pension liabilities this must be done in a way that enables scheme members to make informed choices about their pensions. The practice of offering cash incentives for people to give up valuable salary-related pension rights was a source of particular concern. I therefore very much welcome the work that has been done to come up with an industry Code to stamp out bad practice. This new Code of Practice must be adopted as the standard for all transfer exercises in the future, without exception”.