The Financial Times of January 30 quoted the Department of Work and Pensions as stating: “The rates of rebate (for contracting out) adopted from April 2002 were assessed by the Government Actuary as sufficient to provide a fair reflection of the cost of providing the state benefits forgone…..Changes in the economic conditions would not have altered the economic assumptions – which look to the long term – on which the rebates are based.”
While I accept that financial advisers must explain to clients the investment risks involved, can they now rely on the Government Actuary's calculations when making a recommendation to a client to contract out or contract in?
I seem to recall we were accused of misselling in the past because we relied on the calculations of actuaries who (through trustees) offered transfer values from occupational schemes that were supposed to reflect the true cost of the pension scheme benefits being given up.
I suspect that the above statement will be conveniently forgotten when a future pension misselling scandal occurs and that advisers will once again become the scapegoat.
Director, Temple Court (UK),Romsey, Hampshire