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.
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. She said that amount of time would help “to stabilise pension schemes and allow time for a clearer picture to emerge”.
In its guidance the TPR also allowed employers and scheme trustees to put pension funding payments on hold where necessary and to delay the submission of recovery plans where such information is currently expected by the regulator.
Building on guidance a week earlier that a suspension or reduction in contributions to DB plans “may be appropriate”, the watchdog has now said trustees “should be open” to such requests.
David Fairs, executive director of policy at TPR, said: “The significant measures and clear guidance we are announcing reflect the unprecedented and challenging situation trustees and employers find themselves in.
“The current scheme funding regime is flexible enough to cope with the impact of a severe economic downturn. However, we are actively considering what additional support and guidance we need to provide now so that those who manage and contribute to people’s savings can take the right steps to ensure adequate protection, recognising the challenging situation some scheme sponsors are in.
“We will continue to take a reasonable, pragmatic and proportionate approach in the weeks and months ahead and we call on trustees to follow the guidance closely to make well balanced decisions.”
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