Pension transfer code delayed again after landmark rulings

The code, being published by the Pensions Liberation Industry Group, was initially due to be published in December and was pushed back until this month.

Now Margaret Snowdon, leader of the group and JLT trustee solutions director, told FTAdviser it is being held back again, as elements of the guidance are being reviewed in the light of landmark Pensions Ombudsman decisions in recent weeks and ahead of new pension freedoms in April.

The group’s code is being designed to set out best practice for administrators on transfer requests to help mitigate the threat of pension liberation, that is transfers to schemes which allow access to a person’s fund and which can give rise to penalty charges of 55 per cent.

Ms Snowdon said: “Given we’ve had all the freedom and choice agenda which came out, which we obviously had to take into account wherever we could, and the Pensions Ombudsman’s determinations came out just as we were about to issue the next version, we had to look at it all again to see how that fared.

“There’s so much to try and cover and we are always trying to think what’s still practical, what’s still reasonable to do because we are pretty aware that the pensions minister said that he wanted it to be easy to do and not cost the industry a fortune.”

Elsewhere, Ms Snowdon revealed professional body the Pensions Administration Standards Association, of which she is also chairman, was set to publish additional guidance to its members on how to handle requests relating to the Treasury’s guidance guarantee service, Pension Wise.

She said that at this point there was no strict timescale for the new standards, which will similarly set best practice on the information administrators should provide to members from April, but said “we are talking about weeks or months at worst”.

Earlier this month, the Pensions Ombudsman published the first wave of his long-awaited decisions on the refusal of providers to transfer to alleged pension liberators.

In particular, outgoing pensions ombudsman Tony King ruled that Aviva and Zurich were within the law in refusing to transfer a member’s workplace pension fund, referring to provisions in the Occupational Pension Schemes Act 1996 which state the statutory right to transfer only applies to other workplace schemes.

Ms Snowdon said that the decisions did not generally “change the position of the code” and that the legal position was reasonably clear on the right to transfer being paramount.

She added that the ombudsman had appeared to be “disappointed” the schemes concerned, including Standard Life whose complaint was partially upheld, had not done thorough due diligence and had not spotted when the receiving schemes were not bone fide occupational pensions.

“What we are doing with the code is still very similar to what we’ve said originally and we are trying to help with due diligence, looking at things like scheme rules. We suggest that schemes might want to do that if they are looking for reasons to not transfer .

“It might be useful to look at the rules of the receiving scheme a bit more closely to see if they are valid or not and we had to take all that into account.”

On the new Pasa guidance guarantee standards, Ms Snowden added that the organisation would be looking to be “a little bit specific” on how administrators can help members to gather information related to past schemes, for example.

She continued: “People will be calling up and asking about DB to DC, so administrators need to be ready to deal with that. Partly it is looking at the service that administrators can provide, but it is also talking to the administrator about their clients and what their clients will demand.”

ruth.gillbe@ft.com