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Employer  >  Trustee Zone  >  OPS Matters  >  Transfer value guidance published

Transfer value guidance published

In issue 18 we told you that the DWP had extended the date for implementing the new transfer value calculation basis for Defined Benefit (DB) schemes to 1 October 2008. In an effort to ensure scheme trustees understand and can fulfil the new regulatory requirements, The Pensions Regulator (TPR) has published draft guidance on how a member’s cash equivalent transfer value (CETV) should be calculated.

It’s intended that the guidance will help you make decisions about future assumptions affecting the scheme and member’s benefits such as investment returns, mortality and inflation rates.

In summary

• The draft guidance should be read in conjunction with the regulations
• From 1 October, it’ll be the trustees’ responsibility to make the decisions affecting the CETV calculations
• The draft guidance is divided into 8 parts covering, for example, the calculation of CETVs, CETVs for schemes in wind up and for schemes in a Pension Protection Fund (PPF) assessment period.
• The draft guidance emphasises the supporting role of the scheme actuary.

What’s next?

The six-week consultation period is short and is due to end on 19 September. Once TPR publishes its final guidance, we’ll provide a further summary.

The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice.

Source: The Pensions Regulator - Guidance on calculation of cash equivalent transfer values, August 2008