Following the Pensions Regulator's statement that trustees must be careful when considering enhanced transfer value (ETV) exercises, Hewitt Associates says when run appropriately they can be in the interests of employers, trustees and members.

Kevin Wesbroom, UK lead on global risk services at Hewitt, explained: "We would agree with the Regulator that trustees need to be careful when being approached on enhanced transfer value exercises - but they should not rule them out of hand. Many exercises are now being offered with higher amounts available to members, and more importantly with proper support for members. We all know that a complex pensions communication, like a transfer offer, can be a major challenge for even the most pensions literate, but well constructed exercises can offer clearer information or access to specialist pensions advice."

Wesbroom added that a well financed and organised exercise of this kind can bring with it advantages to members, employers and trustees: "This can be a win:win:win arrangement."

The exercise involves encouraging deferred pensioners to transfer their benefits by enhancing the standard transfer terms offered by the scheme.

"For some individuals, depending on their financial circumstances and the level and form of the enhancement, it may well be in their best interests to transfer," added Alan Howard, head of risk reduction at Hewitt. "The emphasis, however, needs to be on empowering individuals to make appropriate decisions. Based on the Regulator's recent announcement there is some concern that this may not always be the case, with members either unduly pressurised into electing to transfer or not being given appropriate information.

"A well run exercise will involve clear member communication and impartial independent financial advice being financed by the employer - and without pressure to act on that advice."

Two-thirds of respondents to Hewitt's recent Global Risk survey said they were more likely to consider carrying out an ETV exercise than 18 months ago, and a further 15 per cent either have done an ETV exercise or are in the process of implementing one.

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