13 August 2008

The Pensions Regulator (TPR) has failed trustees by publishing draft guidance on calculating cash equivalent transfer values far too late for it to be effective, according to Mercer.

The draft guidance has been designed to help trustees of defined benefit (DB) pension schemes understand and fulfil new responsibilities from the Department for Work and Pensions (DWP), due to come into effect from 1 October 2008. But the publication of this guidance on 8 August has not come in time for trustees who need to reach decisions on the calculation of cash equivalent transfer values well before the October deadline.

Deborah Cooper, head of the retirement resource group at Mercer, commented: “Trustees are already thinking about their new responsibilities. They will have had to consult with their actuary, complete their decision making process and notify their administrators of any changes needed to the calculation basis and disclosures to members well in advance of 1 October to comply with the regulations.

“TPR has an obligation to promote good administration of schemes – having a consultation on guidance that won’t be complete until after it is needed does not help. It just adds an additional burden on trustees who will have decided on a course of action before the guidance is finalised.”

- Pensions Age August 2008