The NAPF has been closely involved in drawing up an industry Code of Practice on Incentive Exercises.
Incentive Exercises are offers to members of defined benefit pension schemes to change the form of their pension benefits. Examples include
- Enhanced Transfer Value exercises, where members transfer their rights from a Defined Benefit to a Defined Contribution arrangement, with an enhancement to the transfer value; and
- Pension Increase Exchanges (‘PIEs’), where members of a Defined Benefit scheme are offered an enhancement to their pension income (or another inducement) in return for surrendering all or part of future pension increases.
The Pensions Minister has raised concerns about poor practice in this area. He was particularly concerned that people might make decisions that are not in their best interests, and these concerns were shared by many stakeholders across the industry.
As a result of these concerns, the NAPF joined forces with other pensions organisations to draw up an industry Code of Practice, and it is hoped this will help to ensure people get the best possible deal for their retirement.
The NAPF will be involved in a Monitoring Body that will assess levels of compliance with the Code and, if necessary will amend it – or recommend that the Government introduce legislation.
Download the Code of Practice
Download the accompanying Practitioners’ Notes