JLT Wealth Management has temporarily suspended current defined-benefit pension transfer exercises following changes by the FSA to the way transfers are calculated.
In April, the FSA published new rules which require firms to use the inflation measure from the existing scheme when calculating transfer comparisons, in a bid to make it more difficult for advisers to recommend an investor to quit their defined-benefit scheme.
JLT is advising on the Axa group pension scheme. The 10,000 members involved in the exercise were given a deadline of May 15 to decide whether to transfer out of the scheme but members have now been told it is likely the deadline will be extended.
JLT has also suspended advice over the Phoenix Group group pension scheme. Last November, Phoenix said it was carrying out a cash-incentivised enhanced transfer value exercise. Around 3,200 deferred members were offered up to £2,000 in cash as part of a deal to give up their guaranteed DB pension. Around 200 members have yet to make a decision.
A Phoenix spokeswoman says: “Pension transfers are on hold until systems have been updated. We have an exercise running, with fewer than 200 people affected by the rule changes presented in the FSA policy statement 12/8. The changes came into force at the start of May and we will be communicating with this group once reporting systems have been updated.”
Both JLT and Axa declined to comment on the issue.