27 April 2012
The Financial Services Authority (FSA) has published new rules
and guidance, following consultation, to strengthen the protection
for members of defined benefit pension schemes who are considering
moving their money into personal pensions.
The changes are designed to deal with the FSA's concern that in
most cases a pension transfer is not in the best interest of
pension scheme members.
The FSA is raising the standards on the assumptions used when a
pension transfer value analysis (TVA) is made. This will make it
less likely that an adviser will be able to recommend a transfer
from a defined benefit pension scheme to a personal pension.
Sheila Nicoll, director of conduct policy at the FSA, said:
"In the vast majority of cases someone in a defined benefit
pension scheme will not be better off transferring to a personal
pension. The new assumptions will make it tougher for advisers to
make the case for a transfer. As a result of these new rules, we
would expect the number of pension transfers to decrease, leaving
pension scheme members better off."