In line with the regulator's approach to educate and enable, and to enforce only as a last resort, a new module to the Trustee toolkit, "Buy-ins and partial Buy-outs," has been published to provide guidance to those considering transferring pensions risk to insurers. This includes:
* what is meant by buy-in and partial buy-out
* the differing roles of the employer and the trustee
* the options and schemes' objectives
* data management and administration
* the process of bulk annuity purchase
Bill Galvin, executive director for strategic development at the regulator said:
"In setting the framework for pension risk transfers, we have endeavoured to enable trustees and their sponsors to manage responsibly any transfer of this risk away from sponsor balance sheets.
At all times, where the risk is transferred to another entity, trustees must be certain that there is no reduction in member security. Where the risk is transferred to the individual member, trustees must take all reasonable steps to ensure members understand the risk they are being asked to take on and the value of the benefit they are foregoing."
The toolkit module is published alongside a new code of practice, 'Circumstances in relation to the material detriment test,' which comes into effect today, designed to sustain effective long-term protection of members' benefits and the PPF, including to enable the regulator to act to prevent transfers to inappropriate vehicles.
To view the press release in full: http://www.thepensionsregulator.gov.uk/mediaCentre/pressReleases/pn09-08.aspx
To view the code of practice: http://www.thepensionsregulator.gov.uk/codesOfPractice/materialDetriment/index.aspx
To access the Trustee toolkit module: http://www.trusteetoolkit.com/
Media relations
The Pensions Regulator
amediarelations@thepensionsregulator.gov.uk
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http://www.trusteetoolkit.com (Free, online learning for trustees)
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