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19th September 2017
:: Press Office | Press Releases | Government delays new transfer value regulations until October 2008

Press Release
 
Government delays new transfer value regulations until October 2008
 
Mike O’Brien, the Minister for Pensions Reform has today made a Written Statement to the House of Commons about the regulations on pensions transfer values.
 
In his Statement O’Brien says, “In the consultation on the calculation of pensions transfer values, a number of respondents asked for more time to get ready before the new regulations take effect. The Government has considered the arguments carefully and has decided to delay bringing the new regulations into force until 1st October 2008. The existing arrangements for the calculation of pensions transfer values will therefore remain in force until that time.”
 
Mike Jones, director of pension education website says, “For many years transfer values have often represented poor value for significant numbers of people who have wanted to move their pensions out of defined benefit schemes for legitimate reasons. Getting this legislation right once and for all is a crucial step towards rebuilding the public’s confidence in the pensions system.”
 
The new transfer value regulations are intended to define the minimum level for cash equivalent transfer values. The regulations do not prevent trustees from paying higher amounts if they consider it appropriate and where scheme rules and trust law allows.
 
Jones adds, “The new regulations place the burden of responsibility on scheme trustees for deciding the assumptions used in calculating transfer values. Balancing the needs of existing members with those of scheme members that want to transfer will be quite a difficult task. The extra time that the Government has given must be welcomed as trustees and advisers consider the impact of the proposed regulations”.
 
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Notes for editors: 
 
MyCompanyPension.co.uk provides pension education, information and communication for scheme members, trustees, sponsoring employers and advisers. The website presents facts and information. MyCompanyPension.co.uk does not give advice; does not sell pensions, life insurance products, investments or mortgages.
 
Under the current arrangements, responsibility for the calculation of pensions transfer values is delegated to actuaries and to their professional body, the Actuarial Profession. Guidance for actuaries on the calculation of individual transfer values is contained in the guidance note GN11.
On 21st March 2006 the Government announced that it intended to legislate, to put the principles underpinning the calculation of individual transfer values into regulations.
In June 2006 the Department consulted on approaches to the calculation of pensions transfer values.
The Government announced in January 2007, that trustees will be required to determine assumptions in the calculation of pensions transfer values on a “best estimate” basis. Discount rates will have regard to “best estimates” of future returns. This approach will mean that the success or sustainability of the pension scheme is not put in jeopardy by any transfers that do take place.
On 6th July 2007, the Department for Work and Pensions began a consultation on draft regulations on the calculation of pensions transfer values. The draft regulations provided that the calculation of transfer values will be based on the expected cost to the scheme of providing the pension. The consultation ran until 17th August, 2007.
 
 
 
 
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Government delays new transfer value regulations until October 2008
 
 
 
  
Release date:
25th October 2007

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