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Warning on pension transfer risk

Nic Cicutti
Saturday 19 March 1994 19:02 EST
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MEMBERS of occupational pension schemes are being warned about the risks of transferring their benefits to new personal pensions, writes Nic Cicutti.

The advice comes from the National Association of Pension Funds, which represents work- based schemes covering millions of employees. NAPF members stand to lose if heavy transfers take place. The association has issued a leaflet to its members that urges staff to consider every angle before deciding whether to transfer benefits from their existing scheme to a private one. Ron Amy, chairman of the NAPF, said: 'The widespread myth that transferring your pension is always the right answer does not make sense.

'The first thing that will happen is that the money available to buy your benefits will decrease because the personal pension company has to cover its costs, often pays commission and builds in a margin for profit - often before it starts to invest your money.'

Pension Transfers - How to Decide is available from from NAPF, 12-18 Grosvenor Gardens, London SW1W 0DH.

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