Requirement for appropriate independent advice on DB to DC transfers

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • Requirement for appropriate independent advice on DB to DC transfers
  • Safeguards introduced on 6 April 2015
  • What form does the appropriate independent advice requirement take?
  • The legislative and regulatory framework
  • What constitutes appropriate independent advice?
  • Who does the appropriate independent advice requirement apply to?
  • Exclusion of unfunded public sector schemes
  • Application to safeguarded-flexible benefits
  • Application to pension credit members
  • What to do if the appropriate independent advice requirement applies
  • More...

FORTHCOMING DEVELOPMENT: In July 2019 the Pensions Administration Standards Association (PASA) DB Transfers Working Group released ‘Defined Benefit Transfers: A Guide to Good Practice guidance’ focusing on what was defined as a ‘Standard’ or straightforward case involving a DB transfer. It was originally intended this guidance would be Part 1 of a two-part release with Part 2 covering ‘Non Standard’ cases. However, the Working Group subsequently agreed that, rather than produce a Part 2, it would create a Code of Good Practice to cover all DB transfers and look to consult with the Industry prior to finalising it.

There followed on 11 February 2020 the publication by PASA of a consultation on its draft Code of Good Practice for Defined Benefit (DB) Transfers. PASA expressed concern that the time taken to process DB transfers varies hugely, with some transfers take months to execute and delays damaging relationships with scheme members and leading to a breakdown of trust resulting in members making decisions which are not in their best interests, or worse still, increasing the risk of them becoming victims of pension scams.

The draft Code aims to create faster, well-communicated, efficient and cost-effective strategies scheme administrators and wider stakeholders can execute. The objectives of the draft Code are to: (i) improve the overall member experience through faster, safer transfers; (ii)

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