Pension Transfer Values

Pension Transfer Values

Guidelines on calculating transfer values for members of defined benefit schemes have been published by the pensions regulator ahead of a period of consultation.  From 1 October 2008, it will be the responsibility of the trustees to take the decisions on which the calculation of cash equivalent transfer values is based.  A cash equivalent transfer value is normally the expected cost to the scheme of providing the member’s accrued benefits.  This value requires assumptions to be made about the future course of events affecting the scheme and the member’s benefits – factors including investment returns, mortality rates and inflation rates.

The regulator’s draft guidance provides suggestions of good practice on the calculation of cash equivalent transfer values, including calculations for schemes in wind up and dealing with enquiries in a Pension Protection Fund assessment period and emphasises the supporting role of the scheme actuary.

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