Pension scheme trustees will breathe a sigh of relief thanks to new guidance on pension transfers, according to Barnett Waddingham.
Published by the Pensions Regulator, the consultation document DB to DC transfers and conversions includes instructions for trustees of defined benefit (DB) pension schemes with members wishing to switch to defined contribution (DC) schemes.
Danny Wilding, partner at Barnett Waddingham, said: "Prior to the publication of today's consultation from the regulator, trustees had very little clear guidance on how to handle transfer requests once the requirement to take 'appropriate financial advice' comes into force in April.
"Trustees will no doubt breathe a sigh of relief following the publication of these clear, step-by-step guidelines. Trustees will also welcome confirmation that, so long as a member has received the required advice, it will not be the trustees' role to stop them from transferring, even if the trustees have doubts on the appropriateness of the member's decision."
The guidance covered processes trustees need to take when receiving transfer requests. It also required them to provide clear information to members regarding the impact of transfer values and to encourage members to seek independent advice prior to transfer.
Stephen Soper, interim chief executive at the Pensions Regulator, said: "DB trustees may experience an increase in the number of requests for transfers and transfer quotes as members consider their options. We have therefore produced this guidance to assist DB trustees to manage transfer requests and their impact."
Calum Cooper, partner and head of trustee DB at Hymans Robertson, said the retirement revolution "put the spotlight on trustees". "They have a duty to act in members' best interests, which may span to engagement to help prevent them from making bad decisions in light of the new freedom they'll have, but also to educate them on the options that are available them," he said.
A consultation on the draft document runs until 17 March 2015.
The document was published as part of a communications package designed to help trustees prepare for changes of pensions taking place on 6 April.
A separate document, entitled The essential guide to governance standards and charge controls, was also published for trustees covering topics such as meeting new governance standards, new charge controls and further governance standards for "master trusts".
