Automatic transfers: a framework for consolidating pension saving

Document type
Corporate author(s)
Great Britain. Department for Work and Pensions
Date of publication
1 February 2015
Poverty Alleviation Welfare Benefits and Financial Inclusion, Older Adults
Social welfare
Material type

Download (217KB )

This policy paper tackles the issue of the increase in dormant occupational pension pots as a result of Automatic Enrolment. With regular job changes in the world of auto-enrolment there is a risk of generating millions of small, stranded pension pots. The government took powers in the Pensions Act 2014 to create a ‘pot follows member’ automatic transfer system, whereby when people change jobs they have the opportunity to consolidate their pension pots into their new employers’ pension schemes. This paper is the culmination of the work that has taken place since the 2014 Act with a wide section of the industry to analyse the different implementation options for automatic transfers and drive towards a safe and efficient industry-led model.

From October 2016 the largest companies will be asked to “match” the many disparate “mini pots” held by each of their staff. Forms will be sent to workers asking whether they would like their old pensions to be transferred to their new plan. Once the system is shown to work, every person who moves jobs in Britain will have their old pension “follow” them when they join a new employer. the government wants this to happen automatically unless someone specifies otherwise.

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