Pension schemes could face litigation, warns Portal
Portal Financial is warning pension schemes that they could face litigation from their members if, having failed to facilitate drawdown provision, they then charge disproportionate fees to transfer away into a flexible scheme that does offer drawdown.
Portal Financial is reacting to warnings from many company pension schemes that they do not have the necessary infrastructure and technology in place to facilitate drawdown, and fears that they are therefore likely to either refuse members or try to charge a large fee.
Jamie Smith-Thompson, managing director of independent pensions specialist Portal Financial, comments:
"Many pension schemes are already saying that they will struggle to offer the new freedoms for pension access as they are unwilling, or simply cannot afford, to implement the technology required to facilitate it. However, we believe there will be a backlash from members from next April as they will feel discriminated against. Moreover, member pension schemes need to be prepared for this and, ultimately, must face the fact that some members may seek legal recourse if they feel they are being unfairly treated.”
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