This plan has got nothing to do with how pension savings and pension funds are taxed. It is all about encouraging a number of smaller pension schemes to coalesce to forma smaller group of bigger schemes, whose investing policy can be more flexible because it has a large investment fund to invest.
Smaller schemes are also more likely to become underfunded and end up being vested in the Pensions Protection scheme, which pays out smaller pensions.
Both DH and I draw our pensions from 2 ofthe biggest pension schemes in the UK and every year, reading the schemes reports, plus of course the size of our annual rises, it is very clear that bigger schemes have better security because their invested money is spread over a wider range of investments, and generally the returns are higher.