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<p>The government believes that people should be free to make their own</p><p> </p><p>choice
about how to use their savings - individuals who have worked hard and saved responsibly
throughout their adult life should have a choice about their pension savings and the
reforms announced at Budget 2014 will deliver this.</p><p> </p><p> </p><p> </p><p>The
new tax framework, which will allow, from April 2015, individuals with a defined contribution
pension to access their entire pension flexibly will apply equally across trust and
contract based money purchase pension schemes. In the public sector, members of defined
contribution schemes will also have access to these flexibilities, including members
with savings in Additional Voluntary Contribution (AVC) arrangements.</p><p> </p><p>
</p><p> </p><p>The Government’s assessment of the impact of the policy is set out
in detail in the Budget costing note and the Tax Information and Impact Note, published
alongside the Taxation of Pensions Bill.</p><p> </p><p> </p><p> </p><p>The government
wants to extend the principles of freedom and choice to as many pension savers as
possible which is why, following an extensive public consultation, it was decided
to permit transfers out of private sector and funded public sector defined benefit
schemes to continue. Giving scheme members the choice to transfer their accrued benefits
into a defined contribution scheme, in order to access their pension pot flexibly
if they wish to.</p><p> </p><p> </p><p>To ensure due consideration is given to the
interests of scheme members, scheme funds and the taxpayer in the continuation of
these transfers for the public service schemes, government set out in the response
to the consultation, <em>Freedom and Choice in Pensions,</em> that it would look to
implement, where appropriate, safeguards akin to those which already exist in the
private sector. We are continuing to discuss these options and others, including with
the Department for Local Government as the department responsible for the Local Government
Pension Scheme, the largest of the funded public service pension schemes, and will
set out further detail on this issue in due course.</p>
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