The Association of Consulting Actuaries has urged the government to give greater flexibility to members of defined benefit pension schemes and allow them to cash out their income directly rather than transferring it to a defined contribution scheme.
The Treasury's Freedom and choice in pensions consultation paper, published in March following the Budget, is seeking views on aspects of the government's flagship pension changes. One of its specific proposals is a ban on members of DB schemes from transferring their funds out into DC schemes.
However, the ACA said this would present significant new restrictions for both scheme members and employers.
'It will reduce the flexibility employers have to offer options that may suit members, and damage the ability that employers currently have to manage pension scheme costs and risks,' said ACA chair David Fairs.
'Furthermore, the practical consequences of a bank are that it would likely contain loopholes, and impose unintended consequences on schemes which are hybrid or more complex in nature.'
Rather than ban DB transfers, the government should 'go further by introducing the facility for retiring members of DB schemes to cash out their benefits directly rather than having to go via a transfer to a DC schemes', he added.