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PASA publishes DB Transfers Guidance, including expected timeframes and Transfers Template

11 July 2019

The Pensions Administration Standards Association (PASA), the trade body established to set, develop, guide and assess administration standards for pension schemes and administrators, has launched a DB Transfers Guidance document.

The Defined Benefit Transfers: A Guide to Good Practice sets out procedures and time frames to help speed up the process for individual pension holders whilst ensuring protection for its members in respect of adhering to regulation and being vigilant against scams.

It has three key aims:

  • Improve the overall member experience through faster, safer transfers;
  • Improve efficiency for administrators;
  • Improve communications and transparency in the processing of transfers.

The Guide only applies to standard cases, which it defines as well as the processes/steps involved. A standard case it defines as meeting the following criteria:

  • The request constitutes a request for a statutory guaranteed cash equivalent transfer value
  • The request is received via the standard business as usual process
  • The scheme administrator has the benefit of some or full automation to calculate the transfer value
  • The transfer value basis and/or scheme discharge paperwork is/are not currently under review.

Not included in the scope are:

  • Cases requiring significant manual intervention
  • Partial transfers
  • Overseas transfers (a transfer of a person residing overseas, involving an overseas adviser or an overseas destination scheme)
  • Where, following appropriate due diligence, the case is suspected to be a pension scam
  • Non-statutory transfers including cases where a transfer requires the specific consent (from the employer/trustee) or requires the exercise of trustee discretion.

For a standard case which is not referred to an actuary, PASA expects a total maximum process time of 7 working days. Where referral to an actuary is involved, 8 working days. For the settlement process, it expects a maximum 9 working day turnaround.

Transfer Template

PASA said it recognised the importance of providing financial advisers “with high quality information and data quickly to ensure the member is able to make a properly informed decision”.

It said: “Valuable time can be spent with questions and answers being exchanged, often with a lack of understanding as to why questions are asked or why particular data is needed. Sometimes advisers fail to appreciate the benefit structures and flexibilities, leading to frustration on all sides.”

The FCA and TPR brought industry representatives together to create a standard transfer template which contains all required scheme and member information.

The resulting Transfer Template, PASA said, “includes examples of every type of calculation allowing advisers and the analysts supporting them to ensure the advice they give is robust.” The template can be found in Appendix 4 of the document.

The Transfer Template has been designed to be used by both advisers and administrators.

PASA added: “Through this Guidance, we recommend administrators adopt the industry developed Transfer Template and ensure both the scheme and the member level information sections are fully completed and sent to members’ advisers on request.”

In addition, PASA states that whilst the Guide is voluntary, “we anticipate the Pensions Ombudsman will reference it when reviewing complaint cases, as a source of what good industry practice looks like.”

Margaret Snowdon, PASA Sponsor of the DB Transfers Working Group, which created the guidance, said the group was “mindful of the delicate balance between member protection and an individual’s statutory rights, and the fact they shouldn’t be hindered when making legitimate transfers.

“There are lots of members who are right now, or could in the future, be making poor choices. It is in our ability, as industry experts, to help by coming together and working to implement this Guide to Good Practice creating faster, better communicated, more efficient and more cost effective approaches that scheme administrators and the industry as a whole, can execute.

Snowdon added that it had been “very reassuring” that “so many professionals joined our working group” and that the Pension Regulator (TPR) had been involved in the process from the outset – “their work on developing the groundbreaking Transfer Template was crucial to its development.”

Guy Opperman MP, Minister for Pensions and Financial Inclusion said: “Transfers give people flexibility when it comes to their pension pots, and they must be fast and safe. This guidance gives the clarity needed – for both schemes and members – to ensure they’re done efficiently and transparently. It is a must-read for anyone with a stake in the pension transfer process.”

To view PASA’s DB Transfers Guidance in full, click here.