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Article | Benefits Hot Topics

PASA issues revised DB transfer guidance

By Mark Dowsey | May 4, 2022

PASA has issued final guidance on dealing with transfers from defined benefit plans. It sets out principles for administrators and moves away from its earlier proposals for specific timescales.
Pension Board and Trustee Consulting

On 3 May 2022, the Pensions Administration Standards Association (PASA) issued its Good Practice Guidance on DB Transfers. The document signals a significant change in approach by PASA, in light of comments received in response to the 2020 consultation on its proposed Code of Practice and the new Conditions for Transfers regulations that came into effect on 30 November 2021.

Many respondents to the 2020 consultation rejected the notion of set timescales for particular stages of dealing with a transfer. Helpfully, the new guidance explicitly recognises that trustees and administrators may be reliant on third parties over whom they have limited influence. It therefore encourages administrators to keep members and others, such as advisers, informed of any delays caused by the third party and to seek “to influence the third party to improve [its] service for the member”.

The guidance acknowledges that trustees and administrators are best placed to apply processes that are appropriate for their particular schemes, but these should be considered and, if appropriate, reviewed to ensure that they accord with the principles set by PASA.

In summary, these principles are that:

  • The member’s experience is paramount – each step of the process should be undertaken as quickly and accurately as possible – bearing in mind the member’s perception, quality of outcome and the administrator’s service reputation
  • Member communications should be timely, fair and clear
  • Members and, where appropriate, others should be kept informed of any delays
  • Administrators should be mindful of the importance of safety and security when setting timescales for each stage of the process
  • Working practices should follow the Guidance and administrators should use the standard template for providing scheme information to a member’s financial adviser
  • Administrators should work collaboratively with third parties to meet the objectives and principles of the Guidance.

As in previous versions, the Guidance specifies that certain transfers are out of its scope – including bulk transfers and information relating to pension sharing. In light of the new conditions, introduced in November 2021, for a member to retain a statutory right to transfer, the Guidance considers that transfers to authorised Master Trust, public sector or authorised CDC schemes should be processed quickly, as should those to schemes on an administrator’s established ‘clean list’. Others are likely to be slower in light of the additional due diligence required.

The Guidance also includes links to other helpful guidance such as that from the Pensions Regulator and the Pension Scams Industry Group.

Ultimately, the Guidance states that the proposed processes are not prescriptive with administrators being able “to adapt them as necessary to fit their preferred operating model”, provided they follow the principles.


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