In the wrangle over the cash equivalent values of pension funds (CETV), where trustees have been given permission to reduce transfer values to reflect the lower underlying asset value of pension funds, the Department for Work and Pensions (DWP) has given permission for trustees to not have to prove why they have reduced the value.
Our view
What a joke yet again! We believe it is both equitable and fair that a transfer value should reflect the underlying solvency of the pension scheme assets but to not have to offer proof is beyond comprehension.
Whilst company pension schemes are expensive for employers and, to be fair, many employees do not value their pension fund or what their employer does for them as much as they should, the fact that a contractual pension promise has been made is still there.
Many pension fund trustees are under increasing pressure will the solvency of their pension scheme. Therefore, measures to protect the scheme would appear sensible. However, to not have to justify this to members, particularly those who wish to transfer out may lead to abuse or even more mis-trust by the public.
Learn more about frozen pensions in the Pensions Adviser.com.
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