Defined Benefit 

Pension transfer tool launches with help of ex-FCA expert

Pension transfer tool launches with help of ex-FCA expert

CashCalc has launched a pensions transfer advice tool with input from ex-Financial Conduct Authority (FCA) technical specialist Rory Percival.  

The transfer value comparator (TVC) and appropriate pension transfer analysis (Apta) tool are stand alone products and advisers can add them to their existing suit of CashCalc products.  

The launch comes after a beta testing period where more than 200 UK pensions transfer specialists and advisers gave input into the shaping of the products.  

Under the FCA's new pension transfer rules, which came into force on 1 October, financial advisers have to provide their clients with a value of how much the benefits in their defined benefit (DB) scheme would cost today in the open market, which is the transfer value comparator.

The TVC will show, in graphical form, the transfer value offered by the DB scheme and the estimated value needed to replace the client's DB income in a defined contribution environment, assuming the investment returns are consistent with the client's attitude to risk.

This will be included in the appropriate pension transfer analysis, or Apta, which will replace the current transfer value analysis (Tvas).

Ray Adams, director and in-house chartered financial planner at CashCalc, said: "As a pension transfer specialist, I have accepted over the years that defined benefit analysis is complicated.

"But it doesn't need to be because we can build software to take away some of the complexity. 

"The new TVC rules from the FCA are fantastic because before clients were simply comparing a small and a big figure.

"But now we can easily demonstrate what is required to buy these benefits and the system that we have built does that in a very nice, easy to understand way." 

The FCA's revised guidance mandates all pension transfer specialists to complete a TVC along with an Apta, replacing the outgoing Transfer Value Analysis.

In a 58-page policy statement published in October the FCA set out new rules on how pension advice should be given to individuals where they are considering transferring away from safeguarded benefits, primarily for DB to defined contribution (DC) pension schemes.

Ricky Chan, director and financial planner at IFS Wealth and Pensions, a client of CashCalc, said from what he had seen in the demonstration videos, the pension transfer tool looked pretty good.

Mr Chan said: "I imagine that it will do exactly what it needs to do in terms of compliance due to the fact that it was built in conjunction with Rory Percival.

"There will be quite a lot of firms using the tool, in light of the new rules that have been published and I think there will be a simple transition for the firms using it."

rosie.quigley@ft.com

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