amadorgs | Shutterstock22 March 2012
The FSA is coming to the end of the consultation period on proposals to change the way pension transfer values are calculated. This consultation, ending on 25 March, seeks to “clarify and update the current standards and aim to ensure that pension scheme members considering a transfer are given a fair assessment of what they will receive in retirement”.
The FSA defines the scope of a pension transfer as the process by which a pension is moved from a DB into a personal pension scheme, but the approach could have influence in other areas of establishing cash equivalence: e.g. tax-free commutation, inter-scheme transfers, purchase of addditional years accrual and so forth.
The Regulator is starting (as has The Pensions Regulator) from the presumption that a pensions transfer exercise will not be in the best interests of the member and is seeking to ensure that the full facts are placed before the member with consistent industry-wide comparisons, which take into account all relevant UK and European legislation. Their press release gives some extracts of the methodology proposed.
Links to press release on the FSA
