Several regulatory bodies have taken steps to warn current and former P&O Ferries employees about the potential dangers associated with defined benefit (DB) pension transfers.
Following the recent controversial and much-publicised redundancies of around 800 employees, the Financial Conduct Authority (FCA), Money and Pensions Service (MaPS) and The Pensions Regulator (TPR) have re-affirmed that transferring out of a DB pension is unlikely to be in savers’ best interests.
A jointly signed letter from these bodies said: “In these times of financial uncertainty, we are asking you to be very careful. Since the coronavirus outbreak began, stock markets have fallen and are likely to go up and down for some time. However, your pension remains a safe, long-term investment for your retirement, and transferring it is a serious decision so please do not do anything in haste.”
Current and former P&O Ferries employees, including those recently made redundant, should ensure any “adviser” with whom they engage is listed on the FCA’s register and authorised to offer services including “advising on pension transfers and pension opt-outs.”
Savers should also be aware of the common signs of potential scams and potential mis-selling. These include receiving cold calls or other unsolicited contact to discuss a transfer out of their P&O Ferries pension scheme. Any members of P&O Ferries’ pension scheme who are considering transferring their pension can find further guidance on what to expect from advisers on the FCA website.
Furthermore, TPR has said it is undertaking discussions with the trustees of P&O Ferries employee pension plans and informed them to write a letter from all three bodies to anyone who requests a cash equivalent transfer value for their pension, telling them of the potential risks of going ahead with a transfer.
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