Relief For Employers On Transfer Value Reforms

The Government has issued its formal response to last summer's consultation document on the calculation of transfer values for members transferring from defined benefit pension schemes.

In summary, it is proposed that trustees of such schemes should:

• calculate transfer values by reference to the expected cost to the scheme of providing the alternative deferred pension benefits

• determine, on a "best estimate" basis and on actuarial advice, the actuarial assumptions to be used in the calculation

• use a discount rate in the calculation which reflects a "best estimate" of future returns, taking into account the existing asset mix of their scheme

• continue to have the power to reduce transfer values in cases of scheme underfunding