PASA urges administrators to use template in new DB transfers guidance
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The Pensions Administration Standards Association has published good practice guidance on defined benefit transfers. The guide allows for flexibility after industry did not respond well to proposed timescales for specific tasks, and includes a template for advisers.
PASA had initially published guidance in 2019 before consulting on a DB transfers code the following year.
It had to revisit this after the government introduced regulations last autumn with a system of red and amber flags for suspicious transfers. “So we decided we’d go for guidance again. A code was going to be too hard, too difficult, too prescriptive,” said PASA president Margaret Snowdon, speaking at the organisation’s annual conference on Tuesday where the new guide was launched.
Where previous publications had looked at standard and non-standard transfers, the new guidance covers all DB transfers, except for bulk transfers and wind-ups, divorce cases or active members. It includes an information template administrators can use for communicating with advisers. “Use that template, that’s our big ask,” said Snowdon.
Timescales ‘really were unpopular’
In the 2019 guidance PASA had advised administrators and trustees not to be too fast with processing transfers but has changed its view somewhat on speed.
“The message we’re trying to get across now is that transfers are not about us,” said Snowdon. “Members have a choice. It’s our job to make it easy and straightforward,” she added, saying transfers should be “faster, safer, better”.
To make transfers faster as well as safer and better, PASA had in the code consultation proposed giving administrators specific numbers of days for certain tasks, but industry has rejected this. The introduction of timescales “really was unpopular”, she said, adding: “We sort of knew that, but we thought they’d get used to it.”
Industry said it wanted flexibility and the freedom to apply its own processes, and the new guide is therefore not prescriptive, she said.
However, Snowdon said it was important to give members plenty of time to make their decision, so administrators should process applications quickly and leave most of the six months window for members to make up their mind.
The guidance is “not prescriptive but encouraging”, she emphasised. “What we want you to do is put yourselves in the shoes of the member. What does the member need from us, how can we make that better, communicate it better.”
