UK Pension scheme trustees will be informing members via a letter about the risks of transferring out of their defined benefit scheme amid the current Covid-19 crisis.
According to guidance published by the Pensions Regulator, trustees will be sending Defined Benefit members looking to transfer retirement funds a letter warning them of the risks during the pandemic and encouraging them to consider the decision carefully.
Regulators and government have issued several warnings to savers about making impulsive alterations to their pensions, warning that impetuous decisions motivated by fear surrounding the coronavirus crisis and the stock market downturn may be exploited by scammers.
In the new guidance, The Pension Regulator is asking trustees to encourage savers to take regulated advice and highlight the free guidance to help them understand their retirement options.
Pension professionals are also being asked to identify increased risks in how a member has decided to access their pension funds and give appropriate warnings of the risks and implications of their chosen option.
As well as sending a predetermined, generic letter signed by The Pension Regulator, the Financial Conduct Authority and the Money and Pensions Service to all DB members who request a cash equivalent transfer value, trustees are also being asked to monitor these requests and inform the FCA of unusual or concerning patterns, such as spikes or the same adviser across multitude requests.