The Pension Regulator had given defined benefit transfers a three month hiatus while also allowing employers to halt contributions in response to the Covid-19 crisis.
The regulator published guidance on Friday (March 27) allowing DB schemes to delay member requests to transfer out of the scheme by up to three months.
This is to give trustees more time to calculate cash equivalent transfer values (CETVs) as due to falling markets caused by the coronavirus pandemic, it is now more difficult for them to be sure of the underlying value of pension funds.
Some schemes may have also experienced an increase in demand for CETV calculations which would place additional strain on administration teams.
Therefore the three month delay will allow schemes to focus on other administrative tasks such as pension payroll and retirement quotations.
Freezing DB transfers should also prevent individuals being targeted by scammers or making poor financial planning decisions in response to the crisis.
But former pensions minister Ros Altmann has previously called for pension transfers to be put on hold for six months, double the amount of time the TPR has allowed for in its guidance.
She said this amount of time would help “to stabilise pension schemes and allow time for a clearer picture to emerge”.
In its guidance the TPR also allowed employers and scheme trustees to put pension funding payments on hold where absolutely necessary and to delay the submission of recovery plans where such information is currently expected by the regulator.
Building on guidance a week earlier that a suspension or reduction in contributions to DB plans “may be appropriate”, the watchdog has now said trustees “should be open” to such requests.
David Fairs, executive director of policy at TPR, said: “The significant measures and clear guidance we are announcing reflect the unprecedented and challenging situation trustees and employers find themselves in.
“The current scheme funding regime is flexible enough to cope with the impact of a severe economic downturn. However, we are actively considering what additional support and guidance we need to provide now so that those who manage and contribute to people’s savings can take the right steps to ensure adequate protection, recognising the challenging situation some scheme sponsors are in.
“We will continue to take a reasonable, pragmatic and proportionate approach in the weeks and months ahead and we call on trustees to follow the guidance closely to make well balanced decisions.”
Tom McPhail, head of policy at Hargreaves Lansdown, said the suspensions laid out by TPR “make sense” to prevent any businesses from going under.
He said: “‘Like the government and other public bodies, our financial regulators are pulling out all the stops to help businesses and individuals get through this time of crisis.
“Keeping the business alive is likely to be in the long-term best interests of the members, even if it means a short-term hit to the funding position of the scheme. Crucially, such action is conditional upon the support of the firm’s bank and other funders and would have to be accompanied by the suspension of any dividend payments.