Selectapension will launch a new pension transfer tool on 2 July ahead of new regulations from the Financial Conduct Authority (FCA) coming into the market.
The investment and planning software firm will replace its existing defined benefit (DB) transfer value analysis (TVAS) tool with one compliant with the transfer value comparator (TVC) and appropriate pension transfer analysis (APTA) reports requirements, which will come into force on 1 October.
Earlier this year, the regulator confirmed that the existing TVAS, which focus on the ‘critical yield’ needed to match a guaranteed income, will be replaced.
Instead the TVC will show, in graphical form, the cash equivalent transfer value (CETV) offered by the DB scheme, plus the estimated value needed to replace the client's DB income in a defined contribution pension, assuming investment returns consistent with a client's attitude to investment risk and they purchase an annuity.
Additionally, Selectapension is launching a new lifetime allowance (LTA) calculator.
The LTA is the maximum amount of money a saver can invest in their pension pot, and benefit from tax relief at their marginal rate, before incurring an additional tax charge of up to 55 per cent.
The provider said with its new tool, users will be able to model scheme comparisons, critical yields and TVC taking into account the lifetime allowance, and demonstrate the impact of the allowance in their income modelling analysis.
A client report will always have the lifetime allowance information regardless of whether there is a breach or not, it added.
All existing DB TVAS subscriptions will be automatically upgraded to APTA with TVC at no additional cost.
Andy McCabe, managing director at Selectapension, argued that the provider’s customers “will value the new tool,” and he is delighted that the firm is “able to offer the new features at no additional charge and well ahead of the FCA deadline”.
Cashflow planning software provider CashCalc has also announced earlier this month that it is planning to launch a new pension transfer tool compliant with the watchdog new rules.
According to Steve Carlson, chartered financial planner at Cardiff-based Carlson Wealth Management, most advisers will be reliant on software/tools to produce the new APTA/TVC reports required by the FCA, so it is vital that providers get this right and get it done quickly.
maria.espadinha@ft.com