Defined contribution (DC) to DC pension transfers must still be completed in "good time" to ensure savers don’t lose out, The Pensions Regulator (TPR) has stated.

In updated Covid-19 guidance to DC schemes, the regulator has emphasised that transfers between DC schemes are a “core financial transaction” and a common way for members to access benefits, and as such, need to be one of a scheme’s priorities during the current crisis.

It emphasised that if a transfer is delayed, and investment values fall in that period, then the members cash equivalent transfer value (CETV) will be reduced, stating that it is “therefore very important to process transfers within a reasonable timeframe”.

Where demand is an issue, trustees have been urged to monitor transfer activity and work with administrators to prioritise “core financial transactions”, including DC transfers.

TPR also noted however, that trustees must also ensure that they are still carrying out sufficient due diligence whilst meeting a reasonable timeframe, also reiterating the potential risk to members from scammers.

The update stressed the importance of previous guidance around communicating with members, which was published earlier this month, calling on trustees to warn savers requesting a DB to DC transfer against doing so in the current crisis.

TPR executive director of policy, David Fairs, added: “The Covid-19 pandemic has created unprecedented challenges for pension schemes and their members. That’s why we’ve been constantly reviewing and updating our guidance to support trustees and protect savers.

“Our latest guidance should help trustees of DC schemes prioritise what’s most important – such as ensuring DC to DC transfers are completed in a reasonable time, so savers don’t lose out.

“As well as carrying out their due diligence on transfers, trustees should help protect members by highlighting the risk from scammers in their own communications.

“Guidance on communicating with members during Covid-19 – including alerting them to the danger from scammers - is available on TPR’s website.”

The updated guidance follows recent PensionBee research, which revealed a 24 per cent year-on-year increase in pension transfers as members use their time in lockdown to organise their finances.

Whilst easements outlined in guidance at the end of March allowed defined benefit (DB) schemes to delay CETV activity for up to three months, TPR has clarified that this is not the case for DC schemes, as the valuation of benefits is “less complex”.

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