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<p>The Government has no current plans to extend the pension flexibilities to members
of unfunded, defined benefit, public service pension schemes. The last Government
restricted transfers from unfunded, defined benefit, public service pension schemes
to those arrangements from which the member may acquire a right or entitlement to
flexible benefits in order to protect the taxpayer from the increased in-year costs
that would result should a large number of members of such schemes elect to transfer
out to a scheme providing flexible access to pension pots.</p><p> </p><p> </p><p>
</p><p>In an unfunded public service pension scheme, there is no fund of assets with
which to finance transfer payments. Instead, they are funded from contributions from
current members and their employers, and through general expenditure.</p><p> </p><p>
</p><p> </p><p>Therefore, should the introduction of the flexibilities have led to
an increase in the number of members transferring out of their unfunded public service
scheme to a scheme providing flexible benefits, there would have been a direct cost
to Government. For every extra pound paid out in transfers, the Government would have
had one less pound to spend that year on public services.</p><p> </p><p> </p><p> </p><p>The
Government estimates that if 1% of all public service workers reaching retirement
took their benefits flexibly, it could cost the tax payer £200m a year. The Government
does not think it is fair to ask taxpayers to meet such in-year costs.</p><p> </p><p>
</p><p> </p><p>Members of funded, defined benefit, public service pension schemes,
such as the Local Government Pension Scheme, continue to be able to transfer. This
is because there is a fund of assets available for use to meet the cost of the transfers.
Government took the decision to treat funded schemes differently for this reason,
extending freedom and choice to as many individuals as possible.</p><p> </p><p> </p><p>
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