What’s John done? DC consolidation is shaken and stirred.

Poet and spy – John Donne

This blog is about the impact of the Treasury’s dramatic intervention yesterday in closing the door on transfers into schemes with protected minimum retirement ages of 55. For the detail read yestterday’s blog 

For now – confusion reigns. The DWP and the Treasury need to be explicit on what this means for workplace pensions.


Here is the crux of the difficulty caused by yesterday’s dramatic announcement by John Glen of the Treasury, that transfers into schemes with protected pensions were banned from a minute to midnight the night before (03/11/21).

There is a question debated between David and Jo which is whether what is being banned is the transfer itself, or simply the right to participate in the protected rights of a scheme accepting the transfer. Jo says the Treasury are telling her it is the transfer itself, which means that if you run a workplace pension looking to consolidate through individual and bulk transfers, you should be pretty sure you have not got a protected minimum retirement age of 55.

Here is my follow up question..

It is not obvious if you have a protected minimum retirement age of 55 in your occupational scheme. You will need to study your scheme rules and get an opinion. Most schemes have flexibiity so the retirement age can float up like a barge in a lock. Each time the Government raises the minimum retirement age – your scheme goes with it.

But if your lawyers wrote a fixed retirement age into your scheme rules, then that’s that. It will take a massive effort to rewrite the rule. Meanwhile, while the money in the scheme’s pots enjoys the dubious privilege of being able to be spent early, no new transfers to the scheme seem to be allowed.

I would welcome views on this from pension scheme lawyers and scheme managers. Thanks to Daniel Gallon on linked in for kicking things off.

Here’s the position as understood by one of our leading pension policy officials

 I don’t think it can be a ban on transfers per se. But yes re protected status. Clear as mud!!

The fine distinction between pension freedom and pension liberation

For Mirror readers, John Glen’s done in their plans for early retirement

“Swapping your pension” is of course a habitual  past-time for savvy mirror readers with pots providing replacement lifetime income from 55 (both of them)

if you had plans to retire at 55, but have not swapped your pension, it is now too late – and you will have to work until 57…

Glen said the government did this on purpose to prevent fraud.

Clear as mud? Well I think mud wins!

Who knows what John’s done?

The weirdest thing about this is that no-one knows what schemes have protected early retirement ages, nobody knows if those that have a total ban on transfers in and no one in the DWP, FCA, TPR or any of the industry trade bodies has done anything to clear the problem up.

Transfers in the pipeline will be allowed through but new applications, including presumably bulk transfers resulting from scheme consolidation and the proposed member exchanges, must be ruled out if the consolidating scheme has a protected minimum retirement age.

The only commentator picking up on this is Britain’s #1 pension journalist, Jo Cumbo

My guess, and this is speculation, is that the response from the Treasury to “stakeholders” was to the ABI , whose members have been quick to praise the move. This from Professional Adviser

Move largely supported by industry

Quilter head of retirement policy Jon Greer said: “We’re delighted HM Treasury has listened to industry feedback and decided to shorten the window of time during which people could join a scheme that offered a protected pension age of 55.

“Having a two-year window could well have encouraged pension savers to move away from their current scheme, including some workplace schemes, purely to get their hands on their pension at a lower age, rather than for considerations around cost or suitability.

“It could also have left pension scheme members vulnerable to pension scams as it would have ignited a ‘buy it now’ pension transfer market with heightened transfer activity that scammers would have thrived in. This is certainly a much better position than what was previously proposed.”

Canada Life technical director Andrew Tully agreed the move is “sensible” and will “help reduce the risks for clients”.

“There was a real concern people would look to transfer between now and 2023 based on access at 55 rather than wider aspects such as charges, flexibility or service. It should also reduce the ability for scammers to prey on client uncertainty.

Meanwhile Quilter’s Jon Greer is quoted as voicing a fear that this transfer ban will lead to yet more complexity in the future.

“That said, we hope that the rules on transfers do not bake additional complexity into the pension system where pension schemes will have to create a ring-fencing system to certain rights, albeit for a much smaller cohort.

“This complexity is all for a two-year increase in the pension age, which for the overwhelming majority isn’t going to make a lot of difference. And it will still add complexity to the future pension dashboard system, and ‘simpler’ pension statements.”

It may also require “red flags” to be thrown whenever a transfer out of a scheme with a protected  early retirement age is proposed. This could cause further problems for the small pots initiative if one or more of the major auto-enrolment workplace pensions is found to have such protection.


John Glen – what have you done?

It’s very far from clear that the DWP were consulted in this. If they were, then there has been nothing on this from Guy Opperman or from David Fairs at the Pension Regulator.

I doubt that the implications for occupational pension schemes (including workplace pension master trusts) have been considered.

One master trust is strongly rumored to have “55” written into the scheme rules and there may be others. Every trustee with a DC scheme or DC section should be checking their rules to see whether they might be taking transfers in illegally.

Transfers arriving from schemes with protection may need to be turned away unless those transferring accept they are giving up protected status – or – perish the thought – these transfers may have to have segregated records and their own process for early payment.

We need urgent attention to this problem because it has been crystallized at 23.59 on Wednesday night, the future is already history and we are left wondering what John Glen has done.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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