The Code of Practice for Incentive Exercises 

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2016 Review of the Code

The Code of Good Practice on Incentive Exercises was launched in June 2012 and we were tasked with monitoring the effectiveness of the Code over a three-year period and with recommending action to government, whether to continue the Code unchanged, amend it to address the evolving market or to set it aside in favour of legislation.  

It has been gratifying to see the Code well received by the industry.  The interest shown in understanding how the Code should be applied in different circumstances through attendance at IE Industry Forums and questions asked of members of the IE Monitoring Board and through our website, has been encouraging.  It is clear that trustees and employers want to comply with the Code, despite its voluntary nature, and we believe that the Code has resulted in better behaviours, better run exercises and less risk of members being disadvantaged.

The review process was carried out in the main by the small group of dedicated experts, the Technical Group of the Board and through consultation with the IE Industry Forum and guidance from the Board.  What we realised early on was that the Principles of the Code resulted in positive behaviours and that change or withdrawal of those Principles could risk a decline in good practice.  We therefore saw no need to change the Principles themselves, but to update the body of the Code to reflect the changing environment.  We also decided to introduce Boundary Examples to help illustrate how the Code could and should be applied in practice.  The revised Code was published in January 2016.

We are grateful to the representatives of organisations from across the industry, who freely gave their time and expertise to review and produce this updated version of the Code of Good Practice and to their employers who made it possible. 



Why a Code?


A Code of Good Practice for Incentive Exercises was introduced in response to industry and government concerns that such exercises could be conducted in a way that disadvantaged pension scheme members.  


The objectives of the Code are to ensure that all incentivised transfer and similar exercises in the future are:

  • done fairly and transparently;

  • communicated in a balanced way and in terms that members can understand;

  • available with appropriate regulated and  qualified independent financial advice that is paid for by the employer;

  • able to achieve high levels of member engagement;

  • provided with regulated access to the independent complaints and compensation process.


The IEMB Technical Group is likely to review the Code in early 2018 to ensure it continues to reflect good practice in a changing market. 

Any  suggestions for areas for us to consider should be emailed to


Sign up as a Supporter of the Principles of the Code


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"The Code of Practice is aimed at improving the protection for pension scheme members involved in incentive exercises and so far appears to have had a positive effect. 


The principles and guidance will ensure that good practice becomes the norm rather than  the exception and will restore confidence in incentive exercises as a legitimate liability management tool.


It is encouraging that so many organisations are supportive of the Code."


Margaret Snowdon OBE, Chair of the Incentive Exercises Monitoring Board