28 June 2006
The Department for Work and Pensions has issued a consultation
document which seeks views on approaches to the calculation of
pension transfer values.
Legislative provision for calculating individual transfer values
between pension arrangements have, broadly, been in place since the
mid-1980s. This consists of DWP regulations enabling transfers to
be made that, other than for certain money purchase benefits,
delegate responsibility for determining the calculation framework
to the Actuarial Profession, who fulfil their obligations by
issuing a mandatory Guidance Note, GN11, dealing with this
issue.
In May 2005, the Actuarial Profession issued a draft revised
version of GN11, known as Exposure Draft 54 (EXD54), asking for
comments on their proposals to alter substantially the framework
for the calculation of transfer values.
As a result of comments made on EXD54, the Actuarial Profession
approached the Government and asked it to reconsider the
legislative basis for the calculation of transfer values. The
Government has decided to review the legislation with a view to
setting out in regulations the principles underpinning the
framework for calculating transfer values, supported by an
actuarial standard issued by the independent Board for Actuarial
Standards, which took over responsibility for setting technical
actuarial standards from 19 May 2006.
The DWP has now issued a consultation document which seeks views
on approaches to the calculation of pension transfer values.
Responses to the consultation are requested by Friday 11 August
2006.
In the meantime the existing DWP regulations remain in force, as
does version 9.2 of GN11 issued on 30 December 2005.
