The Pensions Regulator is monitoring the adoption of the new defined benefit transfers template by pension schemes, its head of policy has said.
Fiona Frobisher was discussing the work the watchdog is developing alongside the Financial Conduct Authority on this issue on the latest FTAdviser Podcast.
She said: “In DB to defined contribution transfers, there is a difference between concerns in the pension world, where you are looking at administrators who are doing things in volume, and what financial advisers are doing, which is very bespoke and in detail.
“Those two worlds need to talk and that has been a problem for a long while. We spent the last couple of years working with industry, FCA and others to draw together a template to say this is a basic set of information that passes from one world to another that you can use.”
The Pensions Administration Standards Association launched guidance earlier this month which dictates that pension schemes and administrators should take no longer than 10 weeks to process standard DB transfers.
The 40-page document also included templates for letters to be sent by the schemes to the members when acknowledging a transfer request, and the DB transfer template which all parties involved in the process are urged to start using.
Ms Frobisher noted that TPR doesn’t have the power to make the template mandatory, as only the Department for Work and Pensions could do that.
She said: “We could obviously go and lobby them, if we thought that was something that needed doing. It is an area we continue to look at, and the DWP do [as well], the minister [for pensions and financial inclusion, Guy Opperman] himself has been quite interested in making sure that this works well.”
Ms Frobisher also confirmed that the regulator will be issuing new guidance for pension schemes in this area soon, as FTAdviser reported in May.
She said: “We know that we need to review our guidance, some of it is to catch up with changes in regulation that have happened, and some of it is to take some learning from these kinds of situations [such as the British Steel debacle] and see what else we can say.
“The basic guidance on [cash equivalent transfer values] CETVs hasn't really been updated since 2008, so we should definitely do that.”
Ms Frobisher also discussed new rules for schemes regarding climate change, and what pension funds should be doing if their trustee aren’t running them properly.
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