New regulations have been published by the UK's Department for Work and Pensions that are aimed at making it easier for employers who are running several smaller schemes to bulk transfer members with protected rights into one single pension plan.
Through mergers and acquisitions companies can be in a position where they are administering a number of smaller pension schemes and they may wish to run them as one scheme.
Where it makes sense for these employers to consolidate their pension schemes into one it will now be less expensive and time-consuming to do so. These changes are about making it easier for employers to run these schemes which will benefit their members, the government says.
Stephen Timms, the minister for pensions, commented: Industry has been supportive of this measure which will make the administration of pension schemes more straightforward and reduce employer costs, whilst still protecting the members of those schemes.
The changes will mean that, subject to approval from actuaries, a member’s rights will be broadly not be less favorable as protected rights can be transferred in the same way as other pension rights are currently. This will help reduce administrative cost and burden on employers.
It is expected that the new regulations will save pension schemes GBP10 million over the next three years and they will come into force from November 28, 2005.