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<p>In answering this question, the term ‘alternative investments’ is assumed to refer
to investments that the individual chooses themselves, either that are unconventional
in that they carry more risk, or are not typical of investments offered by personal
pension schemes.</p><p> </p><p>The Pension Schemes Bill 2019-20 has no provisions
that restrict how members transferring from defined benefits pensions should invest
their pension rights.</p><p> </p><p>Clause 124 of the Pension Schemes Bill contains
provisions to amend the statutory right to transfer and thereby restricts the types
of pension arrangements under which a member can compel trustees to approve a transfer
request. Members can still use their statutory right to transfer to an authorised
Master Trust or an FCA authorised pension arrangement.</p><p> </p><p>In accordance
with the principles of freedom and choice, members with defined benefit pension rights
have the right to transfer to a defined contribution scheme to self-invest. These
self-invested personal pension schemes can offer the member a range of investment
funds, including alternative investments.</p><p> </p><p>Members with a cash equivalent
greater than £30,000 must seek financial advice before they transfer or convert their
pension rights into flexible benefits, that can be used for alternative investments.
FCA rules for pension transfer advisers require that the form of investment the member
is considering on transfer is considered as part of their recommendation to the member
to transfer or not. However, the member retains the right to follow or ignore the
advice they receive. Where trustees’ have concerns with the alternative investments
in a members’ choice of destination, they should make the member aware as part of
their overall requirement to carry out due diligence in the member’s interest.</p><p><strong>
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