The following Pensions guidance note provides comprehensive and up to date legal information covering:
The introduction of auto-enrolment has led to a substantial increase in the number of small dormant defined contribution (DC) pension pots. This is regarded as an issue by the government and the pension industry because:
it is inefficient for pension providers to administer small dormant pension pots, and
there is an increased risk of members losing track of multiple small pension pots scattered between pension providers
To address the problem, in July 2012, the government resolved to bring forward legislation introducing a system of automatic transfers of small DC pension pots (also known as ‘pot follows member’) whereby a pension pot would effectively follow the member into their new scheme as they move employment. The legislative framework for a system of automatic transfers was subsequently enacted through the Pensions Act 2014, s 33, Sch 17, under which regulations can be made to implement such a system.DWP response to consultation on improving transfers and dealing with small pension pots (July 2012)
In February 2015, the government published a paper setting out how it expected to implement the system of automatic transfers and its preferred implementation model. It intended to develop and consult later in 2015 on the draft legislation to implement the system for automatic transfers. However, in October 2015, a ministerial statement was issued announcing that plans for automatic transfers would be put on hold
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