Defined Benefit  

DB transfer template expected next month

DB transfer template expected next month

After almost two years of work from regulators and the industry, a pension transfer template, to be filled in by pension administrators when asked for a defined benefit transfer value, is expected to be published next month.

The template was initially part of The Pensions Regulator's remit after it had responded to industry calls for a standardisation of rules in 2017.

But after working with the Financial Conduct Authority (FCA) on this matter, and showing early drafts to industry players, the regulator passed on this task to the Pensions Administration Standards Association.

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The idea of a template was to reduce the amount of information requests from advisers and the time spent on facilitating the DB transfer process.

Margaret Snowdon, president of the industry body, told FTAdviser that Pasa will be publishing a code for its members on this matter in June.

The work on the DB transfer template started with a roundtable discussion in July 2017, at which point the regulator heard the views of financial advisers, providers, and scheme administrators on DB transfer information requests.

Sir Steve Webb, the former pensions minister now director of policy at Royal London, had flagged this issue with TPR after being told by advisers about their frustrations in trying to get information from the scheme administrators to allow them to give the right advice to clients.

Sir Steve said: "Giving advice on pension transfers is made much more difficult when DB schemes fail to supply consistent or comprehensive information about the DB rights under consideration. 

"It is unfortunate that the template project has taken so long, but good news that a version is due to emerge shortly. 

"Whilst it will not have the force of law, I hope that all DB schemes will offer this standardised information which will streamline the transfer process for advisers and their clients."

Ian Browne, pensions expert at Quilter, is hoping that two years of work will mean that it is a comprehensive document.

He said: "We understand the need for it to be initially issued in the form of guidance so any kinks can be worked out. However, we hope in due course it becomes compulsory. Standardisation of these forms will help ease this complex process for both advisers and providers."

According to Paul Gibson, managing director at Granite Financial Planning, a pension transfer template is long overdue in the DB transfer market.

He said: "Although not compulsory hopefully all scheme administrators will follow it.

"I hope that professional indemnity insurers have also had input into the process as they seem to be dictating the market at present.

"They have taken two years to get it ready, so it must be good."

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