White paper: Helping DB members make better retirement decisions

This joint paper from LCP and Royal London aims to answer key questions about the role of schemes, advisers, regulators and government in the process of reshaping pension benefits for members of defined benefit (DB) pension schemes.

Key findings:

• Most schemes contact members for the first time only as they approach their normal pension age; very few write to members well before pension age about their options.
• Although more than 90% of schemes stress the importance of seeking financial advice to members, only 5% provide access to a named financial advisor that has been selected by the trustees or employer.
• Advisers report a large increase in the numbers wanting to transfer their DB pension rights into a defined contribution arrangement; typical transfer values lie in the range of £250,000 to £500,000. The transfer value is typically a multiple of 25 to 30 times the size of the annual pension foregone.

The paper makes a series of recommendations to ensure that DB scheme members can get the best outcomes and navigate the choices available to them.