Covid-19 – what trustees must know about cash equivalent transfer values

In this briefing note, we address the key considerations for trustees of defined benefit (DB) pension schemes when dealing with member requests to transfer away their pension benefits, given the current Covid-19 pandemic. This includes:

• Whether to (temporarily) suspend transfer quotations
• Whether to amend the assumptions for calculating cash equivalent transfer values
• Administration issues, including increased risk of pension scams and capacity / cashflow restraints.

As a result, we have prepared insight and advice to assist trustees with the key cash equivalent transfer values (CETV) related decisions that DB schemes are currently facing. Every scheme will be different and so the required course of action will depend on the specific circumstances, and on obtaining professional advice from your scheme actuary and investment consultants.

From understanding what to do when a request is received, to assessing the strength of the employer convenant and how this impacts CETV options, this briefing note outline the actions trustees may wish to take.