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Pensions trade body launches DB transfers guidance

The Pensions Administration Standards Association has today launched its guidance on defined benefit transfers. The template has been created in cooperation with the pensions regulator and announced today at event in London with the pension minister Guy Opperman as a guest speaker.

Created by PASA’s DB Transfers Working Group, the trade body says that its Guide to Good Practice “seeks to create a framework which achieves the right balance between member protection and an individual’s statutory right to take their pension in a different shape or form, via a flexible arrangement.”

PASA’s DB Transfers Guidance has three key aims:

  • Improve the overall member experience through faster, safer transfers
  • Improve efficiency for administrators
  • Improve communications and transparency in the processing of transfers.

PASA sponsor of the DB transfers working group Margaret Snowdon says: “We are always mindful of the delicate balance between member protection and an individual’s statutory rights, and the fact they shouldn’t be hindered when making legitimate transfers.

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“There are lots of members who are right now, or could in the future, be making poor choices. It is in our ability, as industry experts, to help by coming together and working to implement this Guide to Good Practice creating faster, better communicated, more efficient and more cost effective approaches that scheme administrators and the industry as a whole, can execute.

“It has therefore been very reassuring that so many professionals joined our working group and under the brilliant leadership of the chair, James Ellison, worked hard to produce this guidance, taking us into new territory.

“We are especially pleased that the Pensions Regulator (TPR) has been involved in the process from the outset and their work on developing the groundbreaking transfer template was crucial to its development.”

Minister for pensions and financial inclusion and MP Guy Opperman adds: “Transfers give people flexibility when it comes to their pension pots, and they must be fast and safe. This guidance gives the clarity needed – for both schemes and members – to ensure they’re done efficiently and transparently. It is a must-read for anyone with a stake in the pension transfer process.”

TPR’s executive director of regulatory policy, analysis and advice David Fairs says: “We welcome the launch of the PASA good practice guide for DB transfers. The standardised data template in particular will make the process of moving pension funds more efficient, by making it easier for savers and advisers to get the details they need to make informed decisions.

“The development of the template by the regulators and the industry working together will bring real benefits for providers, advisers and, most importantly, savers themselves.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Any initiative which brings credibility to DB transfers must be supported, but as is mentioned there is a fine balance between members exercising a statutory right and protecting them against bad decisions.

    Given the FCA starting point against transfers as not usually being in the member’s best interests, and their disapproval of the high number of positive recommendations, surely it should be made clear that it is not an automatic right, but if there is a valid case for transfer then the process will be swift and efficient.

  2. Thomas Frodsham 8th July 2019 at 8:09 pm

    I think the time for guidance has long past, everyone involved in this area should be aware. What is needed now is some real life interaction with clients that want to transfer. Get at the coal face, because unfortunately the clients do believe it is their money, and that they do have a statutory right to do as they please. I want to see a regulator or compliance officer handle this in a face to face meeting along with the adviser, and deal with objections. I’m sure the answer will be, they are not authorised to give advice, but the adviser is, they can offer guidance for the clients to make an informed decision

    • Thomas, whilst I understand your points, as someone who has sat in front of clients, who does check files and set standards. I would make the following observation.

      Your job, as is the job of any adviser in any area, is to provide the client with advice as to what is in their best interests and why this is the case.

      Your clients have come to you for “advice”, so my question is, are you going to give them that advice, or simply agree with them?

      What they “want” or think they want to do, is not actually relevant, when it comes to what is in their best interests.

      I’ve seen many advisers handle “insistent clients” extremely well and I think most people are pretty reasonable, if you can simply and succinctly explain “why” what they are telling you they want to do is not in their best interests.

      If they do not, or are not prepared to listen to advice, do you actually want them as a client?

      If their reasoning makes sense and shows that what they want to do, is likely to be the best option for them, then there is no reason you cannot recommend it.

      Our company will not accept insistent clients on DB transfers for any reason, simply because the risk to the business when compared to the revenue being generated is not even close to worth it. Why would we want to earn say £3,000, whilst exposing ourselves to a potential liability of £100,000+, should that client realise at a later point that we were right all along and should have not let them be silly?

      People can be irrational, but in many ways it’s no different to dealing with a child throwing a tantrum, do you give in and let them have their own way even though you know it’s bad for them, or do you explain and stand your ground?

      You are an adviser, not an order taker.

  3. “There are lots of members who are right now, or could in the future, be making poor choices.”

    The change in law gave scheme members the right to make a choice. The only protection against poor choices is to take advice and follow it. It’s that simple.

    Having had a quick scan of the guidance it appears to me to be focussed on administration and process, not member protection.

  4. @ Duncan Gafney – hear! hear!
    I would imagine the “it’s their money” route is one of the challenges addressed in putting this guidance together.
    Certainly, recent activity indicates the time for guidance is far from past; in fact it is more necessary than ever.

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