Regulatory Alerts2017-03-09
Added · Updated
Guidance for firms on how to calculate redress for unsuitable defined benefit pension transfers
Respondents must use specified assumptions to calculate redress for complaints regarding unsuitable transfers of defined benefit pension scheme benefits into personal pension schemes. The guidance mandates the use of RPI and CPI inflation rates derived from Bank of England gilt curves, pre- and post-retirement discount rates based on equity returns and gilt liability curves, and mortality tables from the Institute and Faculty of Actuaries. Calculations must account for pension increase caps and floors, personal pension charges up to 0.75%, and specific demographic factors such as assumed retirement age and spouse age differences. These requirements apply to complaints received after 3 August 2016 concerning transfers between 29 April 1988 and 30 June 1994.
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