UK defined benefit (DB) schemes are braced for an increase in valuation requests from members amid a consultation to close off transfers to defined contribution (DC) plans.

In this year’s Budget, the government announced plans to liberalise at-retirement choices for DC savers, prompting fears of increased requests for DB members to transfer out.

However, in anticipation, the government began to consult on closing off transfers for DB savers for fear a mass exodus would damage the UK’s debt and equity markets.

The consultation period ends of 11 June 2014.

With any decision to close transfers expected to be immediate, consultancies have reported both statistical and anecdotal evidence of increased action.

Barnett Waddingham told IPE it had witnessed a 60% increase in the number of cash equivalent transfer value (CETV) requests from DB members in the three weeks since the Budget, compared to the same period in 2013.

Paul Latimer, head of pensions administration at the firm said: “Our increase certainly suggests there could be more awareness to some of the issues from the public. The main thing however is whether the government is going to put a stop to this.”

Aon Hewitt partner Lynda Whitney said the consultancy had also witnessed a range of questions from DB members.

She said: “From individuals, requests have been around not just CETVs, but people assuming they would be entitled to the flexibility available in DC, and not understanding they will not get this directly from DB.

“After this is explained, alongside that we still do not whether they will be able to transfer out, then most are asking for CETVs.”

Partner in Mercer’s Financial Strategy Group, Matthew Demwell, said the consultancy had also witnessed increased action from DB members looking for information on pension pots.

“Anecdotally, we’re hearing of more people ringing up asking how to get hold of their money. If anything it is more misunderstanding about what people can and cannot do, but this isn’t all that surprising given the Budget headlines,” he said.

In addition to this, research from Aon Hewitt showed just one-tenth of trustees, pension managers and finance directors thought transfers should be banned.

The government is already looking to ban transfers from public sector unfunded DB schemes, suggesting it cannot manage the cash flow requirements for large transfers.

However, in the survey, only 20% thought DB savers should be entitled to the same flexibility as DC savers.

The majority of respondents thought transfer should be permitted, but with restrictions, such as extending the Code of Good Practice currently used with incentive exercises.

Ben Roe, head of the liability management practice at Aon Hewitt, said: “This looks to be a very sensible balanced position that delegates have proposed.

”We could well see a very short-term flurry of activity, as some DB members are concerned that their existing ability to transfer will be curtailed or stopped altogether at the end of the consultation period.”