Trustees have been warned that there are no ‘risk-free’ responses when it comes to transferring a member’s benefits out of a defined benefit pension scheme.

Analysis from Royal London and Eversheds Sutherland found that although there may not be a hard and fast rule for which course of action to take during a DB transfer, 'doing nothing' is not risk-free.

“When it comes to trustees and pension transfers, there is no ‘risk-free’ response,” said Eversheds Sutherland partner and head of pensions, Francois Barker. “The British Steel case demonstrates the reputational damage which can be done when members are left to find their own sources of advice.

“Trustees who engage with the issue in a properly governed way may well be less exposed than those who do nothing at all."

Alongside Royal London, Eversheds Sutherland have produced guidance to trustees which seeks to provide a ‘roadmap’ of engagement by trustees, ranging from minimal involvement to full engagement, where trustees appoint nominated IFAs for members to use and supervising their performances.

“Whilst there is no one-size-fits-all solution to this dilemma, we hope that this guide will help trustees to judge the right level of involvement in supporting members who may be considering a transfer,” continued Barker.

The report also hopes to provide help for trustees in selecting an IFA firm, including a list of questions which trustees should ask of advice firms seeking to be appointed.

Royal London director of policy, Steve Webb, added: “Despite all of the controversy around this issue, it remains the case that transferring out of a DB pension will the right answer for some people in some circumstances.

“There is much to be said for trustees helping members to access high quality, affordable financial advice to help them to decide if such a transfer is right for them.”

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