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Lawson blames actuaries for DB ‘bungs’

Standard Life head of pensions policy John Lawson says the actuarial profession is to blame for firms offering “bungs” to employees to opt out of final-salary schemes.

In Money Marketing last week, president of the Faculty of Actuaries Stewart Ritchie said IFAs will be made the scapegoats if staff complain they lost out by accepting inducements to transfer out of schemes.

Lawson says the reason that “bungs” are being offered is because transfer values are inadequate due to actuarial guidance governing transfer value calculations. He says the actuarial profession failed to sort this out last year when it consulted on the issue and “passed the buck” to the Government.

The Department for Work and Pensions has just completed a consultation with the industry on the future of transfer values.

Lawson says: “The actuarial profession had the opportunity to sort this out by ensuring transfer values were fair but abdicated responsibility. It seems a bit rich now to complain about bungs when they would not exist if transfer values were fair in the first place.”

Actuarial Profession Pensions Board chairman Gordon Sharp says: “We are not passing the buck. We made it clear last year, and the DWP agreed with us, that it should not be just up to the actuarial profession to calculate the basis of transfer values.”

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