Two-thirds of pensions professionals said that the same flexibility offered to defined contribution (DC) schemes should be extended to defined benefit (DB) scheme members, Aon Hewitt has said.

Despite the majority of pensions professionals supporting increased flexibility for DB members, concerns were also raised over the potential for members to take poor decisions given the increased flexibility on offer.

Over 200 pension mangers, trustees and finance directors took part in Aon Hewitt's Budget teleconference on the new flexibilities offered to members of DC schemes from April 2015.

When asked if a member of a private sector DB scheme should be allowed to transfer out into a DC arrangement, 70% said that that the transfers should be permitted, but with some restrictions imposed.

Only 10% thought that transfers should be banned, and 20% of pensions professionals thought transfers should be available without any restrictions.

Aon Hewitt head of liability management practice Ben Roe said: "This looks to be a very sensible balanced position that delegates have proposed. There is no reason to deny DB members the Budget flexibilities that DC members will enjoy, but we do need to recognise the special nature of a DB promise.

"Allowing members to transfer - but possibly only after they have taken advice - seems a fair compromise between banning transfers and unrestricted transfers. It would also help to reassure the Treasury that there will not be a flood of exits from DB schemes, which might potentially de-stabilise the investment markets in government and corporate bonds."

He said that there could be a short-term "flurry of activity" as some DB members are concerned that their existing ability to transfer could be stopped altogether at the end of the consultation period on 11 June.

He added: "We have already experienced a number of DB members wanting to ensure they can access the full Budget flexibility in the future by transferring sooner rather than later.

"This puts severe pressure on all those involved - members, trustees and the independent financial advisers who provide advice on the transfer. Anybody wishing to consider such a transfer needs to move fast."

First published 15.04.2014

monique_simpson@wilmington.co.uk