The expected explosion in transfer requests from defined benefit (DB) to defined contribution (DC) schemes has not materialised according to a number of consultancies in the industry.
A number of administrators contacted by Financial Director‘s sister title Professional Pensions said they were surprised by the development.
Premier Pensions Management senior consultant John Reeve said: “Looking at our data, we have been expecting a peak for some time, after the budget really. Literally, the day after the budget we were talking about the fact that there was potentially going to be a rush on these. We have not seen a big peak interestingly.”
Before it was clear that the government would not outlaw DB to DC transfers, “there was a bit of a buy now while stocks” attitude, according to Reeve, but interest has fallen since then.
Xerox head of pension administration Girish Menezes echoed Reeve’s view. He said: “The trajectory is about the same as the last two years. It is slightly higher in the last two months but two months does not make it statistically significant.”
In the run up to April 2015, Xafinity head of proposition development Paul Darlow said “I would expect more quotation requests to be received as we approach April and I expect an increase in the number of transfers actually going through.”
Meanwhile, research by Towers Watson, Attitudes to retirement in a post-Budget world, surveyed 2,036 employees aged 50-64 working for medium and large-sized non-governmental organisations.
According to the survey, 9% of employees approaching retirement with DB pensions think they would be interested in exchanging most or all of this pension for a DC pot that they can dip into as they wish.
A further 11% would be interested in exchanging half of their DB pension and 24% in exchanging less than half of it.
However, Barnett Waddingham has seen an increase of 37% year on year.
The firm processed 146 transfers in the six months up to 20 September, up from 106 over the same period last year.
Barnett Waddingham partner Carole Ward said: “There is going to be a big increase from people transferring their DB benefits to a DC arrangement so they can take it as cash.
“Our latest stats show about a 40% increase. This is just our own experience but I would have said that was fairly typical, we have a good cross section of schemes.”
This is a smaller percentage than the previous samples which showed a 50% increase in activity over the first three weeks after the Budget and a 120% rise in the first two months.