1. WELCOME TO THE TAVISTOCK DB PENSION TRANSFER TRAINING DAY

2. OVERALL OBJECTIVES
Understand the benefits payable by a defined benefit scheme
Understand the pension transfer process
Understand the key issues for pension transfer advice

3. UNDERSTAND THE BENEFITS PAYABLE BY A DEFINED BENEFIT SCHEME

4. INCOME FOR THE REST OF YOUR LIFE!
Secure income based on a promise laid down in the scheme rules
Could be on a final salary basis or a career average basis
Definition of pensionable remuneration can vary
Accrual rate can vary
The risk is taken by the scheme
For a money purchase scheme the income depends on the approach taken, and the size of the pension pot at the time. The risk is taken by the individual

5. STATUTORY ESCALATION RATES
Accrual period
Escalation
6 April 1978 – 5 April 1988
GMP only: Full CPI protection previously provided by the State – not anymore!
6 April 1988 – 5 April 1997
GMP only: Scheme pays CPI up to a maximum of 3%, any balance up to CPI previously paid by the State – not anymore!
Pre-6 April 1997 excess over GMP
No statutory requirement to escalate benefits in payment
6 April 1997 – 5 April 2005
The whole pension is increased in line with increases in CPI to a maximum of 5% per annum (LPI)
6 April 2005 –
The whole pension is increased in line with increases in CPI to a maximum of 2.5% per annum (LPI)

6. PENSION COMMENCEMENT LUMP SUMS
Private sector DB schemes typically pay PCLS by commutation
The commutation factor used may not represent a ‘good exchange rate’
DB schemes can pay PCLS using in house money purchase AVCs
This may be less than the PCLS payable via money purchase schemes which typically pay 25% of the fund value when PCLS is taken
This however may not be the case when remaining lifetime allowance is an issue or transitional protection applies to the PCLS

7. Pension x Commutation Factor 1 + (0.15 x Commutation Factor)
PCLS
Pension x Commutation Factor
1 + (0.15 x Commutation Factor)

8. NORMAL RETIREMENT AGE
This is usually the age the employee will take benefits
The employee can however retire earlier or later
They may or may not be able to continue to accrue benefits beyond the NRA
Most schemes have equalised their NRA for men and women at age 65
Some haven’t however due to problems caused with equalising GMP

9. EARLY LEAVER OPTIONS For Defined Benefit Schemes
0-3 Months’ Pensionable Service
3 Months’ – 2 Years’ Pensionable Service
2 Years’ Plus
Pensionable Service
Refund of Contributions (short service refund)
Yes
Yes (unless a preserved pension offered instead) No
Preservation of Benefits
Yes (unless refund of contributions offered instead)
Transfer Out
Vesting Benefits From Age 55
For Individual Defined Contribution Plans
Funds either remain invested or are transferred out

10. EARLY RETIREMENT
It is generally possible to retire early in a DB scheme from age 55 – though the scheme rules need to be checked
Early retirement will result in an early retirement factor/percentage reduction applied to the pension accrued as at the actual date of retirement, typically 0.5% a month
Transferring to a money purchase scheme may improve the early retirement position
In a money purchase scheme the ill-health pension will be determined by the member’s age, the size of the fund and the income/lump sum option selected (enhanced/impaired annuity rates may be available)
Flexi-access drawdown allows unrestricted withdrawals during the member’s remaining lifetime

11. THE SCHEME’S ACTUARY MAY USE THE FOLLOWING APPROACHES TO CALCULATE A MEMBER’S SCHEME PENSION IF THEY RETIRE EARLY DUE TO ILL-HEALTH:
The scheme pension could be based on service to the date of ill-health early retirement
Or it could be based on prospective service to the scheme’s normal retirement age and the salary at the date of ill-health early retirement
Or somewhere between the above two approaches
In all instances there would be no early retirement penalty

12. SERIOUS ILL HEALTH COMMUTATION
Life expectancy less than 12 months
The whole fund may be commuted for a lump sum using a commutation factor if life expectancy is less than a year
The capital value of the lump sum is calculated using a commutation factor selected by the scheme trustees
For DB schemes the entitlement only applies to uncrystallised/unused pensions
Satisfactory medical evidence required from a registered medical practitioner
Otherwise classed as an Unauthorised Payment
Pre-75:
Tax free lump sum up to remaining lifetime allowance
Excess taxed at 55%
75 & over:
Taxed as pension income under PAYE

13. DEATH BENEFITS
In a DB scheme the scheme rules determine the death benefits payable
These will differ pre- and post-retirement and whether pre-retirement the member is active or deferred, and if there is any GMP element
Money purchase schemes offer greater choice and flexibility of options to the beneficiary

14. DEATH BENEFITS PRE-RETIREMENT
Active scheme member:
DIS lump sum – could be directly from scheme assets or from a separate insured DIS scheme
Spouse’s/civil partner’s/dependant’s pension – usually a percentage of the member’s remuneration at the date of death
All continuing income benefits taxable on the recipient as scheme pension
Any continuing income can only be paid to a dependant

15. DEATH BENEFITS PRE-RETIREMENT
Deferred members:
Beneficiaries usually receive a percentage of the member’s preserved pension revalued to the date of death
It is not common for defined benefit schemes to pay lump sum death benefits when a deferred member dies, as death- in-service benefits will cease when employment ends
However, there are occasions where a scheme may pay a lump sum death benefit to a deferred member in addition to survivor pension benefits
For example, member contributions may be returned

16. DEATH BENEFITS POST-RETIREMENT
There could be a guarantee period (max ten years, though typically five years)
There may be a spouse’s/civil partner’s/dependant’s pension payable
All benefits taxable on the recipient as scheme pension and continuing income can only be paid to a dependant

17. SIMILARITIES AND DIFFERENCES BETWEEN A DB SCHEME AND A DC SCHEME IN TERMS OF WHO DEATH BENEFITS CAN BE PAID TO ON THE MEMBER’S DEATH
In both DB and money purchase schemes lump sum death benefits can be paid to anyone nominated by the member but payment remains at the scheme trustees’ discretion
In a DB scheme a continuing income can only be paid to a spouse/civil partner/financial dependant/child of the member as defined by the scheme rules
Whereas in a money purchase scheme a continuing income can be paid to anyone nominated by the member or the scheme administrator
In a money purchase scheme, following the death of the nominee a successor can in turn inherit the remaining pension benefits

18. PENSIONS PROTECTION FUND
Compensation fund to protect existing and future pensioners of defined benefit schemes
When employers become insolvent and the scheme is unable to meet its liabilities.
PPF is funded by a levy on defined benefit pension schemes
With a money purchase scheme the FSCS steps in if the pension provider fails and pays 100% of the claim, with no upper limit
Member
Overall Compensation Cap
100%
All members who have reached scheme normal retirement age
Ill health pensions
Spouses pensions
None
90%
Other scheme members including
Members under normal retirement age
Early retirees receiving pensions
2017/18: £34, at age 65 (90% of £38,505.61)

19. UNDERSTAND THE PENSION TRANSFER ADVICE PROCESS

20. MEMBER’S OR SURVIVOR’S SAFEGUARDED BENEFITS > £30,000
WHEN IS ADVICE NEEDED?
APPROPRIATE INDEPENDENT
ADVICE NEEDED
MEMBER’S OR SURVIVOR’S SAFEGUARDED BENEFITS > £30,000
FLEXIBLE BENEFITS
If in any doubt then treat the benefits as being safeguarded

21. THE PENSION SCHEMES ACT 2015 DESCRIBES BENEFIT CATEGORIES WITHIN A SCHEME AS:
FLEXIBLE BENEFITS ARE MONEY PURCHASE BENEFITS, CASH BALANCE BENEFITS AND ANY BENEFIT WHICH IS CALCULATED BY REFERENCE TO AN AMOUNT AVAILABLE FOR THE PROVISION OF BENEFITS TO OR IN RESPECT OF THE MEMBER
SAFEGUARDED BENEFITS ARE BENEFITS THAT ARE NEITHER MONEY PURCHASE OR CASH BALANCE BENEFITS

22. WHAT ARE SAFEGUARDED BENEFITS?
Benefits that are neither money purchase nor cash balance:
A DB scheme pension – based on pensionable service, pensionable remuneration, and accrual rate
A Guaranteed Annuity Rate – benefits are calculated by reference to the guarantee not just the plan value
S32 policy containing Guaranteed Minimum Pension (GMP) – and so must guarantee to provide benefits at least equivalent to the GMP at SPA
Guaranteed pension at retirement - a basic guaranteed pension increased by the addition of bonuses over time

23. APPROPRIATE INDEPENDENT ADVICE
Appropriate: the adviser is appropriately authorised and regulated
Independent: of the scheme, and not necessarily an IFA; can be a restricted adviser also
The trustees have a duty to check that appropriate independent advice has been received where the CETV exceeds £30,000
The trustee does not have to check that the advice is suitable

24. STATUTORY RIGHT TO TRANSFER
The member has a statutory right to transfer out: Exception = GMP
Flexible
Safeguarded enefits

25. THE STATUTORY PENSION TRANSFER PROCESS
Member applies for the statement of entitlement
The trustees must inform the member of the need for financial advice within one month of the initial request
The guarantee date must be set within three months of the initial request
The trustees must provide the statement of entitlement to the member and inform them of the deadline for receiving confirmation of advice within ten days of the guarantee date
The member must apply for the transfer in writing within three months of the guarantee date
The member must provide proof of independent advice within three months of the date the statement of entitlement is provided to the member
The trustees must make the transfer within six months of the guarantee date having already checked that independent advice has been received by the member

26. TYPES OF PENSION TRANSFER ADVICE
Pre-retirement advice:
The client does not intend to access benefits within the next twelve months
The focus is on capital growth over medium to long-term
The critical yield will be more relevant
At retirement advice:
The client intends to start drawing benefits immediately or within the next twelve months
Critical yield is less relevant
Income and capital needs are accurately quantifiable

27. KEY STAGES IN THE ADVICE PROCESS1
Establishing and defining the client relationship 2
Gathering client data and determining goals and expectations 3
Analysing and evaluating the client’s financial status 4
Developing and presenting the financial plan 5
Implementation of the financial planning recommendations 6
Monitoring and review

28. ESTABLISHING AND DEFINING THE CLIENT RELATIONSHIP
Necessary to establish the responsibilities of all parties:
Who has the regulatory responsibility
How the relationship will be conducted
How the advice will be delivered
Who the client should contact with any queries
The tenure of the relationship
Who will provide any ongoing advice

29. GATHERING DATA AND DETERMINING GOALS AND EXPECTATIONS
Hard facts – these are the factual details about the client’s personal and financial situation
Soft facts – these are the client’s attitudes, beliefs, opinions and feelings

30. THE TWO ELEMENTS THAT COMPRISE A CLIENT’S ATTITUDE TO RISK
Tolerance for loss:
This is the amount of risk that the client is willing to take.
This will generally be based on the client’s previous experience,
their understanding and knowledge of investments and risks,
and their personality.

31. THE TWO ELEMENTS THAT COMPRISE A CLIENT’S ATTITUDE TO RISK
 Capacity for loss:
This is the amount of risk that the client can take without their standard of living being affected. This should take account of:
Timescale of the investment.
The maximum amount of loss that can reasonably be absorbed by the client.
The other assets the client may have access to.

32. THE SEVEN QUESTIONS SUGGESTED BY THE REGULATOR
Designed to investigate the subjective issues in relation to pension transfers:
The security of pension funds
Percentage of benefits
Cash sums at retirement
Early retirement
Lump sum death benefits
Spouse’s and dependant’s pension
Risk and reward

33. MAIN DOCUMENTS TO OBTAIN
Statement of entitlement contains the CETV and information about the transfer value being offered
The CETV notes provide useful technical information regarding the pension scheme
The scheme member’s booklet sets out the terms and conditions of the scheme and provides scheme information relevant to the class of member
Scheme funding booklet

34. ADDITIONAL IMPORTANT INFORMATION
If the member is deferred then a full breakdown of the deferred pension and how it is revalued is needed
Details of the retirement options including commutation rate
Details of death benefits pre- and post-retirement
Details of early retirement
Details of ill-health retirement
Details of the financial security of the scheme including any recovery plan

35. ANALYSIS AND EVALUATION
The basis is set out in COBS 19.1
A transfer value analysis needs to be carried out typically using a TVA system (TVAS) – though this is not a regulatory requirement
The benefits in the ceding DB scheme must be compared with the benefits available from a scheme that provides flexible benefits using reasonable assumptions

36. TRANSFER VALUE ANALYSIS
The FCA requires a comparison between the benefits likely to be paid from a DB scheme (or any other safeguarded benefits) with the benefits available on transfer to a scheme that provides flexible benefits
This act of comparison is called a transfer value analysis
The comparison must use assumptions laid down by the FCA in COBS
The comparison must:
Ensure there is sufficient information for the client to make an informed decision
Draw the client’s attention to the benefits and drawbacks involved in transferring
Be presented to the client in good time
A Transfer Value Analysis System is usually used

37. ANALYSIS AND EVALUATION
The assumptions used in a TVAS are set out in COBS :
Annuity interest rate – currently 1.3%
Revaluation rates – currently RPI (2.5%)
Indexation/escalation for RPI-linked schemes – currently 2.5%
Indexation/escalation for CPI-linked schemes – currently 2.0%
Mortality based on 2012 UK National Population projections

38. THE TVA COMPARISON SHOULD…..
The FCA states in COBS that the TVA comparison should:
Demonstrate that the firm has taken into account all of the client’s relevant circumstances;
Examine the benefits and options available under the ceding scheme, and the effect of replacing them with the benefits and options under the proposed scheme;
Explain the assumptions on which the analysis is based and the rates of return required to match the benefits being given up;
Use rates of return to illustrate potential benefits which take into account the likely expected returns of the assets in which the client’s funds will be invested; and
Compare the benefits available at normal retirement age under that scheme where an immediate crystallisation of benefits is sought prior to that age.

39. SUITABILITY
Rules relating to suitability applicable to any investment advice are found in COBS 9.2 with additional guidance relating to pension transfer advice in COBS 19.1
The starting point is that a pension transfer, conversion or opt-out would NOT be suitable for the client
Firm needs to demonstrate clear evidence why such a change would be in the client’s best interests
Advice should be in writing

40. SUITABILITY
On 3 October 2017, the FCA issued an update to its work on DB pension transfers to assess the advice consumers are receiving from firms and whether they are at risk of harm
The FCA had concerns regarding the suitability of transfer advice provided to clients:
in 88 cases where the recommendation was to transfer, the FCA found that 17% were unsuitable, and in a further 36% of cases it was unclear if the recommendation was suitable
the recommended product and fund were found to be unsuitable in 24% cases, and not clearly suitable in another 40%.
As a result of the FCA’s DB transfers assessments, four firms have chosen to stop advising on DB transfers, with its wider work on scams leading to 32 firms choosing to stop providing advice or deciding to limit their pension transfer activity.

41. SUITABILITY
The FCA is concerned that many firms had designed processes and procedures which result in transfers where the suitability of advice could not be established by the firm. This included firms:
failing to obtain enough information about clients’ needs and personal circumstances
failing to consider those needs alongside the client’s objectives when making a recommendation
not making an adequate assessment of the risk a client is willing and able to take in relation to their pension benefits.
In some cases, advisers had failed to make appropriate comparisons between the DB scheme and the intended receiving scheme.
The findings from this work informed the FCA’s proposals in its recent consultation paper (CP17/16) on “Advising on Pension Transfers”, and will be taken into account in the FCA’s response to the consultation.

42. DEVELOPING AND PRESENTING THE PLAN
A full report with a covering letter summarising the main points could be worthwhile
Report structure:
Introduction
Personal and financial circumstances
Details and analysis of the scheme
Recommendation
Summary
The client should be given sufficient time to make a decision without being rushed by the expiry of the guarantee date
Due to the complexity, a face-to-face meeting is probably best – more than one meeting may be needed

43. SUITABILITY REPORT
What three things does the FCA expect a suitability report to include?
A summary of the advantages and disadvantages of the personal recommendation made.
An analysis of the financial implications if the recommendation is to opt-out.
A summary of any other material information.

44. SUITABILITY REPORT
The report should inform the client about the benefits they will be giving up and the implications
Specifically:
That the replacement benefits may fall short of replicating those in the DB scheme
The potential investment risk and annuity risk the client will be taking on
The report should also cover the risk factors that are specific to the client

45. THE RISK FACTORS
The risk factors are ‘attributes, characteristics, external factors or other variables that increase the risk associated with how the consumer has decided to access their pension savings’
The types of risk factors that the FCA expect to be covered in a suitability report are:
The client’s state of health
Loss of guarantees
Whether the client has a partner or any dependants
Inflation
Sustainability of income in retirement
Tax implications
Charges
Impact on means tested benefits
Debt

46. IMPLEMENTATION
The receiving scheme will require a transfer in form and possibly confirmation of advice has been provided
The ceding scheme’s requirements can vary:
Confirmation that appropriate independent advice has been received
Confirmation of ID
Confirmation of age
A transfer request and discharge form completed by the member
A receiving scheme warranty will usually need to be completed confirming that the receiving scheme can receive the transfer and is a registered pension scheme
Possibly a questionnaire for the member to describe how they were approached and their reasons for wanting to transfer
Possible requirement for the member’s spouse to also sign the paperwork
All completed paperwork needs to be completed within the three month period starting from the guarantee date

47. MONITORING AND REVIEW Ongoing monitoring should occur in relation to:
The performance of the investments and whether the critical yield is being achieved
Any changes that will impact on the financial plan whether personal/legislative or taxation
When drawdown has commenced a review of the client’s capital and income needs

48. KEY ISSUES FOR PENSION TRANSFER ADVICE

49. THE FCA’S GUIDANCE ON SUITABILITY OF A TRANSFER
The advice should clearly demonstrate the client’s income needs and expectations and how these can be achieved
The receiving scheme and investments selected should be suitable for the client’s requirements and risk profile
The manner in which the funds will be accessed needs to be taken into account
Alternative ways of achieving the client’s objectives need to be considered
The relevant wider circumstances need to be considered

50. DEMONSTRATING INCOME REQUIREMENTS – ACCUMULATION PHASE
The same analysis is needed but it is more difficult to establish needs and expectations precisely
Therefore important to agree assumptions with the client
Completing a budget planner could be helpful

51. DEMONSTRATING INCOME REQUIREMENTS – AT OR NEAR RETIREMENT
Proximity to retirement will impact on this
For those close to retirement it is important to establish base line income required i.e. the minimum standard of living the client is willing to accept
Lifestyle and aspirational expenditure also need to be established
There needs to be a comparison as to how agreed needs and expectations can be met using existing safeguarded and proposed flexible benefits

52. THE RECEIVING SCHEME
When assessing the suitability of a product, the following should be considered:
The flexibility of income
Options for payment of death benefits
Investment options
The cost of administration and services provided

53. INVESTMENT STRATEGY
This should be suitable to achieve the client’s needs and objectives as well as being suitable for their attitude to risk
Factors that affect attitude to risk:
Timescale
Wealth
Past experience
Other investments
Any ethical considerations

54. THE MANNER IN WHICH THE FUNDS WILL BE ACCESSED
Lifetime annuity – conventional or flexible?
Flexi-access drawdown?
UFPLS?
Phased retirement?

55. LIFETIME ANNUITIES Purchased from insurance company
May offer annuity protection
May offer guarantee period – no longer a maximum of 10 years
Payable for life, at least annually, in advance or arrears
Purchased from insurance company

56. THE CIRCUMSTANCES IN WHICH A LIFETIME ANNUITY MAY BE SUITABLE FOR AN INDIVIDUAL HAVING TRANSFERRED INTO A MONEY PURCHASE SCHEME
A lifetime annuity may be suitable where the individual:
Has a low appetite for risk
Has low or no capacity for loss
Needs a guaranteed income
Has no desire to manage investment or their pension
Has a longer life expectancy based on family history
Has a medical condition that will allow them to obtain an enhanced annuity
Is single and can purchase a higher income than they may obtain under their DB scheme
Part of the transferred fund is used to purchase a lifetime annuity to cover base line living expenses

57. FLEXI-ACCESS DRAWDOWN (FAD)
PCLS normally 25% and balance designated for drawdown
No restriction on withdrawals and therefore no review system
Flexible drawdown before 6 April 2015 converted to flexi access drawdown from 6 April 2015
Newly designated FAD: MPAA triggered once income taken from FAD fund

58. UNCRYSTALLISED FUNDS PENSION LUMP SUM (UFPLS)
No PCLS but normally 25% of funds taken will be tax-free
Remainder will be taxable as non-savings-income
Must be made from uncrystallised MP fund
Must have reached the NMPA (currently age 55) or retired early through ill-health/protected pension age
Must have some lifetime allowance remaining

59. UFPLS NOT AVAILABLE
UFPLS cannot be taken from uncrystallised funds where the member has:
Primary protection or enhanced protection on lump sum rights of more than £375,000
Lifetime allowance enhancement factor (and available portion of lump sum allowance is less than 25% of proposed UFPLS)
UFPLS cannot be taken from a MP plan which has scheme-specific tax- free cash protection

60. PHASED RETIREMENT
It is unusual for a defined benefit scheme to allow the phased introduction of benefits, though it is available under ‘enabling’ legislation
Methods of phasing:
Phased annuity purchase
Phased capped drawdown
Periodic UFPLS
Phased flexi-access drawdown

61. EXPLORE OTHER OPTIONS FOR ACHIEVING THE CLIENT’S OBJECTIVES
PCLS at retirement is typically used to clear debts or for a major item of capital expenditure – is there another way to achieve this?
Leaving behind a lump sum death benefit is often cited as a reason for transferring - is there another way to achieve this?
Flexibility of income is often cited as a reason for transferring – is a partial transfer available?

62. THE RELEVANT WIDER CIRCUMSTANCES NEED TO BE CONSIDERED……
Is an enhanced transfer value being offered?
Is a pension increase exchange being offered?
Will there potentially be a lifetime allowance charge?
Is the client in serious ill health?
The client’s willingness to take on the risks
The issue of tax
The big ‘What Ifs’….

63. ENHANCED TRANSFER VALUE
Offered by schemes as schemes are becoming more expensive to run
Offered to deferred members of the scheme
Reduces the scheme’s liabilities and future risk
Usually offered for a limited period e.g. 3 months
The cost of providing the enhancement is usually covered by the company to ensure the security of the remaining members is not compromised

64. PENSION INCREASE EXCHANGE
The member gives up future guaranteed increases to their pension in return for a higher initial pension with no future increases
It can only be applied to non-statutory increases

65. PIE BENEFITS & DRAWBACKS
Higher initial income
Higher PCLS
May be beneficial for a member in poor health
Higher spouse’s pension
DRAWBACKS
If the member lives longer than average they may be worse off
Value for testing against the LTA will be higher
Pension input in the final year before retirement will be higher for an active member
The higher initial pension may affect the member’s State benefits

66. LIFETIME ALLOWANCE Benefit Crystallisation Events Taking pensions
Taking lump sums
Reaching age 75
Dying
Transferring to a QROPS
Fund value calculation – differs between money purchase and defined benefit schemes
Taking benefits in stages
– benefits taken previously will impact on the lifetime allowance available now
25 x factor pre-A day
20 x factor post-A day

67. THE IMPACT OF SERIOUS ILL HEALTH
It is important to make the member aware that transferring out of a DB scheme while in serious ill health could potentially result in the resulting money purchase scheme being subject to IHT if they die within two years of making the transfer
60% of something is better than 100% of nothing

68. INCREASED FLEXIBILITY = INCREASED RISK!
Investment risk
The value of the fund can go down as well as up
Withdrawals in drawdown can amplify the investment risk
Sequencing risk – the order in which profits and losses are made can make a big difference
Mortality risk – mortality drag
Increases with age (especially beyond age 75)
Much lighter with a spouse’s pension
Longevity risk – the risk of outliving your pension
Inflation risk – very important when giving up DB escalation
Annuity risk – the risk that annuity rates will not increase/will fall in the future

69. THE ISSUE OF TAX…. The main tax considerations are:
The member’s desire to manage their tax position
Where the member has fixed/enhanced protection from the lifetime allowance then transferring could potentially result in loss of their transitional protection
Where the member has scheme specific lump sum protection that would be lost on transfer
Whether the act of transferring out will either potentially increase or reduce the sum available tax- free
If the member wishes to make ongoing contributions whether or not they have triggered the MPAA
The potential for high transfer values to create lifetime allowance problems
The differential between taxation of death benefits under a DB scheme and a money purchase scheme

70. THE BIG ‘WHAT IFs’ - STRESS TESTING THE ADVICE
A cashflow model can demonstrate how the pension portfolio might perform in a range of scenarios:
Where future returns are lower than expected
Where living longer than expected
Where future inflation is higher than historically suggested
Where there is a need for an ad hoc withdrawal
Where there is a need to increase income
Where there is a sudden or permanent loss of assets

71. CP17/16: ADVISING ON PENSION TRANSFERS
Published June 2017, and resulting policy statement (PS) will be issued in early 2018
Main proposals:
All advice on safeguarded benefits must result in a personal recommendation
Handbook guidance on assessing suitability to be updated
Introducing guidance on the role of a pension transfer specialist
Replace TVA requirement with appropriate pension transfer analysis using a prescribed comparator still based on future annuitisation

72. OVERALL OBJECTIVES
Understand the benefits payable by a defined benefit scheme
Understand the pension transfer process
Understand the key issues for pension transfer advice