The Pension Regulator had given defined benefit transfers a three month hiatus while also allowing employers to halt contributions in response to the Covid-19 crisis.

The regulator published guidance on Friday (March 27) allowing DB schemes to delay member requests to transfer out of the scheme by up to three months. This is to give trustees more time to calculate cash equivalent transfer values (CETVs) as due to falling markets caused by the coronavirus pandemic, it is now more difficult for them to be sure of the underlying value of pension funds. Some schemes may have also experienced an increase in demand for CETV calculations which would place additional strain on administration teams.

Therefore the three month delay will allow schemes to focus on other administrative tasks such as pension payroll and retirement quotations. Freezing DB transfers should also prevent individuals being targeted by scammers or making poor financial planning decisions in response to the crisis. But former pensions minister Ros Altmann has previously called for pension transfers to be put on hold for six months, double the amount of time the TPR has allowed for in its guidance. She said this amount of time would help “to stabilise pension schemes and allow time for a clearer picture to emerge”.

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