Transfers between defined contribution (DC) pension schemes must still be completed in good time, despite the COVID-19 pandemic, according to updated guidance issued by The Pensions Regulator (TPR).
The guidance reminds trustees that transfers between DC schemes is one of a number of “core financial transactions” that help members access their benefits, and must remain a priority.
Previous advice issued by the regulator at the end of March outlined how trustees of defined benefit (DB) schemes may delay member requests for transfer quotations by up to three months to review their transfer basis.
However, TPR said that this is not the case for transfers between DC schemes where the valuation of benefits is less complex.
“Our latest guidance should help trustees of DC schemes prioritise what’s most important – such as ensuring DC to DC transfers are completed in a reasonable time, so savers don’t lose out,” said TPR executive director of policy David Fairs.
“As well as carrying out their due diligence on transfers, trustees should help protect members by highlighting the risk from scammers in their own communications.
“Guidance on communicating with members during COVID-19 – including alerting them to the danger from scammers - is available on TPR’s website.”
The latest advice outlines how, if a transfer is delayed, and investments fall in value in that period, a member’s cash equivalent transfer value (CETV) - the amount available to move to an alternative plan - will be reduced.
Trustees must process transfers within a reasonable timeframe while still carrying out due diligence, under the guidance, and monitor all transfer activity from their scheme and work with administrators if they encounter any issues meeting demand.
“The COVID-19 pandemic has created unprecedented challenges for pension schemes and their members,” Fairs said. “That’s why we’ve been constantly reviewing and updating our guidance to support trustees and protect savers.”