The Occupational Pension Schemes (Early Leavers: Cash Transfer Sums and Contribution Refunds) Regulations 2006 have been laid before Parliament today.
They provide that, where a member of an occupational pension scheme leaves the scheme with at least three months' qualifying service, but with no right to a pension from the scheme, they will be entitled to receive either a cash sum to be transferred to another pension scheme, or to a refund of their contributions. The choice is the member's. Currently, people are usually only entitled to a refund of contributions.
The DTI states "This will provide more of an incentive to build up pension rights than currently exists. If the member decides to take the cash transfer sum then they will benefit not only from their own contributions to the scheme but also those of the employer."
The new Regulations will come into force on 6th April 2006.
Occupational Pension Schemes (Early Leavers: Cash Transfer Sums and Contribution Refunds) Regulations 2006