The Pensions Regulator could extend powers that allow trustees to suspend defined benefit transfers and payments if it is deemed necessary.

The watchdog’s executive director David Fairs made the admission in a webinar hosted by XPS Pensions Group.

The regulator introduced emergency measures to allow DB schemes to suspend transfers in response to Covid-19 at the end of March.

Fairs was asked by webinar participants what trustees should do when the period of flexibility comes to an end.

He said: “It may well be we decide to extend the period if it is an appropriate action to take. The experience where we have surveyed a large number of pension schemes has been mixed as some have seen no increase in requests for transfer values. Some have actually seen a reduction due to volatility.

“When I have spoken to some professional trustees, they have said the experience is markedly different from scheme to scheme. So, in some schemes there has been no change in demand, but others have seen a significant increase in transfer values and that has put some pressure on them operationally.

“There is also some concern when those large requests come through it is because of scam activity. So, in those cases it is right trustees look really hard at the requests for transfers, whether scams are in operation and protect members as much as they can. Therefore, trustees need to keep their position under review, and so do we.”

Fairs also said the regulator is reviewing whether to extend the easement rule on transfers to defined contribution schemes and may issue guidance in the next week or two.

When asked about suspending auto-enrolment contributions due to the financial pressures from Covid-19, Fairs said: “This is really difficult and a challenge. We recognise where employers are paying contributions to a scheme will be particularly valuable if markets return to normality soon.

“There is a balancing act and we monitor the situation on a weekly basis regarding where contributions are invested in a timely fashion versus members who opt out due to financial pressures.

“We may come to a different conclusion but at the moment we think it is right auto-enrolment stays as it is so people can save for their retirement.”

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