New pensions guidelines are confusing
David Woods, 15 August 2008
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Guidance released by the Pensions Regulator on new rules for employees seeking to take a cash lump sum from their pension will cause confusion for employers and trustees, according to pensions experts.
From 1 October the trustees of a pension scheme will be responsible for setting minimum transfer values on a best estimate basis. It means an actuary will no longer be required.
The draft guidance from the Regulator is supposed to help trustees apply the new legislation. However Joanne Livingstone, technical director at consulting actuaries Punter Southall, argues that the guidance will lead to widespread difficulties for trustees because the will delay providing quotations to members until they are sure issues have been resolved.
According to Livingstone, the guidance is unclear on issues such as longevity depending on differing pension sizes. She said: "Members seeking a quote on 1 October might have to wait for up to six months until the trustees can be sure that their proposed calculation meets the expectations in the Regulator's final guidance which will, we hope, clarify all such uncertainties."
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