UK - OPRA has defended its decision to allow pension schemes to delay giving members written value calculations when they want to transfer out.
And the regulator – which has been accused of “locking” members into poorly-performing final salary plans – insists there is no great rush of people requesting transfers out of schemes with funding difficulties.
OPRA was forced to speak out following widespread criticism of its decision, which comes ahead of government regulations enabling schemes to base transfer values on interim calculations rather than higher valuations made several years ago.
OPRA spokesman Nick Edmans accused national newspapers of scaremongering.
He said that no trustee had contacted OPRA to verify the reports but the pensions advisory service OPAS had received calls from concerned scheme members.
OPAS technical director Des Hamilton said this type of negative media coverage was only adding to the public’s “crisis of confidence” in pensions.
He said: “The whole pensions industry is being portrayed as being flawed and we feel there is a great lack of confidence in the system and it is not being helped by this type of reporting.”
Hymans Robertson partner Ross Russell said OPRA’s actions on transfer values were of most relevance to companies which were in danger of going out of business with a scheme in deficit.
He argued that trustees at such schemes faced a big dilemma if they made a transfer based on an over-generous and out-of-date valuation.
Russell said: “Trustees in this situation are concerned that if they paid out a transfer now, particularly to a senior director with a large pension, this would incur the wrath of members who were faced with pension cuts once the company and scheme were wound up in the next year or two.”
Only schemes with less than 90% funding under the minimum funding requirement are allowed to delay providing statements of transfer values.Government regulations on transfer values are due out before the summer.
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