New pension transfer regulations from 1 October 2008

The final regulations and draft guidance on the calculation of pension equivalent transfer values (ETV) come into force on 1 October. A key change is that the responsibility for calculating cash ETVs will lie with trustees rather than with actuaries. Paul Dooley, senior consultant at Aon Consulting, warns that few members accept ETVs at the minimum level. “Employers looking to reduce defined benefit liabilities by encouraging members to transfer should focus on what level of enhanced transfer value will have the desired effect.”

Back to Employee Benefits Report for Financial Directors – September 2008