Defined Benefit  

Regulator to increase guidance on pension transfers

Regulator to increase guidance on pension transfers

The Pensions Regulator is planning to launch a web hub in September for trustees facing restructure, which will include guidance on pension transfers.

This comes in response to the independent review of the British Steel Pension Scheme (BSPS) debacle, conducted by ex-Money Advice Service chief and Pension Superfund trustee Caroline Rookes.

In its action plan published yesterday (April 30), TPR stated it is working on a guide for trustees to provide appropriate support to members who are considering a cash transfer.

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This will be part of a wider content hub for trustees which are facing employer restructure or changes.

A cross working group has also been created for the trustees, which is led by TPR and includes officials from the Pension Protection Fund, the Financial Conduct Authority and the Money and Pensions Service.

This web hub will include case studies and examples of best practice, a list of warning signs at different stages of restructuring, and improved guidance on what good looks like.

One of Ms Rookes' recommendations was that TPR, FCA and MaPS should develop guidance for members, explaining the risks of DB transfers and how to seek help.

The watchdog said it has already started signposting members to The Pensions Advisory Service (now MaPS) in cases where there is uncertainty around a pension scheme’s future.

Ms Rookes also stressed that MaPS and the FCA should revise their adviser directories and ensure they’re fit for purpose.

On this matter, TPR stated that the FCA is currently carrying out a "significant piece of work" on its register.

This will improve a number of the features, including ensuring important updates (such as restrictions to permissions) are more easily identifiable and visible to consumers.

Members of the BSPS were asked to decide by December 2017 whether to move their defined benefit pension pots to a new plan, BSPS II, or stay in the old fund, which was to be moved to the Pension Protection Fund as part of a restructuring of pension liabilities.

The scheme had about 130,000 members of which 44,000 were deferred, which meant they had the option of transferring out.

About 8,000 of these transferred out by October last year, collectively worth about £2.8bn.

Several steelworkers appeared to be transferring out after being lured by cheap deals offered by unregulated introducer firm Celtic Wealth Management & Financial Planning, which then referred the clients to advice firm Active Wealth, which is now in liquidation.