Legal & General has pulled out of the market for defined benefit schemes for small empl-oyers as it ...
Legal & General has pulled out of the market for defined benefit schemes for small empl-oyers as it believes there is no longer sufficient demand for these products, writes Leo Bland.
The group is no longer writing new business for insured DB products for schemes of up to 50 lives but will continue to look for fund management mandates for large schemes of 500 lives and above.
Legal & General is also no longer offering admininistration services for large DB schemes. Instead, it is focusing on marketing group personal pensions to small employers in the run up to the launch of stakeholder pensions in April 2000.
Adrian Boulding, pensions strategy director at Legal & General, said: "Essentially, the final salary market for small employers is a shrinking market. Small employers today are going for GPPs with a view to turning them into stakeholder schemes as soon as this arrives.
"We are also offering what we call our guarantee of full stakeholder transferability on GPPs. We will rebase the GPP contract when stakeholder pensions come in as if it had been a stakeholder from the outset.
"The defined benefit arena for small schemes is a shrinking book of business and the opportunities for new business are virtually non-existent."
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