DC benefits can be transferred into the National Pension Trust, protecting their shape and value, whilst removing the cost, risk and responsibility from the employer / transferring trustees.
The National Pension Trust can:
- Protect valuable pre-A day tax-free cash calculation bases;
- Ensure death-in-service lump sum benefits remain free of inheritance tax;
- Negate the impact of Market Value Adjustments on with-profit investments; and
- Protect valuable Guaranteed Annuity Rates.
Non-consent transfer saves time and cost
DC benefits from trust-based schemes can be transferred into the National Pension Trust without the need for member consent. This is helpful where trustees or employers either would like, or are required, to secure DC benefits because:
- The employer no longer wishes to meet the cost of administering former employees’ benefits;
- The scheme is being wound-up;
- The scheme is entering the Financial Assistance Scheme or Pension Protection Fund (PPF);
- The trustees recognise that they are unable to devote sufficient time or resource to effectively govern the benefits (e.g. DC section of a hybrid scheme).
Members can also voluntarily transfer accumulated benefits into the National Pension Trust at any time, free of charge.
Having spent many years supporting members in their funding, investment and retirement decisions, many employers and trustees are more comfortable moving members’ benefits into the National Pension Trust than other pension vehicles. This is because the National Pension Trust continues to afford members a high level of support, unlike other arrangements.