Transfers

This generically refers to the transfer of benefits.

Specifically however, it is essential that firms understand what constitutes a ‘pension transfer’ (as opposed to a pension switch – see ‘S’).

The FCA defines a pension transfer as:

A transaction resulting from the decision of a retail client who is an individual, to transfer deferred benefits from:

(a) an occupational pension scheme;
(b) an individual pension contract providing fixed or guaranteed benefits that replace similar benefits under a defined benefits pension scheme; or
(c) (in the cancellation rules (COBS15)) a stakeholder pension scheme or personal pension scheme.

to:

(d) a stakeholder pension scheme;
(e) a personal pension scheme: or
(f)  a deferred annuity policy where the eventual benefits depend on investment performance in the period up to the intended retirement date.

Please note that a pension transfer relates to the transfer of ‘deferred benefits’ which the FCA describes as:

The glossary definition of a pension transfer refers to deferred benefits. In this context benefits are deferred if they are not continuing to accrue and the benefits are not being taken. If an individual has access to the benefits (perhaps due to early retirement rights) but is not intending to crystallise the benefits then they are deferred benefits. If an individual is transferring benefits for the purpose of crystallising the benefits these will not be considered deferred benefits (but there must be evidence that the scheme member does intend to take/ crystallise the benefits).

All pension transfers must be advised, or signed-off, by a suitably qualified Pension Transfer Specialist.

Further guidance can be found here

http://www.fca.org.uk/firms/financial-services-products/investments/pension-transfers

Suitability reports must contain sufficient detail to justify any pension transfer, including the results from pension transfer analysis (TVA), alternatives, disadvantages, risks, costs and charges.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

About the Author

Director - Having joined us directly from university, David quickly developed into an indispensable member of the team. As our IT Director he is responsible for ATEB’s technology strategies, security systems and platforms. He has been at the forefront of the development of ATEB Suitability and instrumental in ensuring that the complex regulatory requirements are catered for in an interactive and intuitive fashion. He would be delighted to discuss its capabilities with you in more detail.

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