![]() ![]() Prior to the introduction of the TVC, it was clear that a TVAS was NOT required when a member had already attained the scheme’s Normal Retirement Age (NRA) and was retiring immediately. TVC required when a member has already attained Normal Retirement Age?.So, what are the problems? There are several, but I will focus on four today. Whatever you or I think of the TVC, it is here to stay so we need to focus on implementing the new rules. Those of you who followed the consultation process will know the entire premise of the TVC (along with the assumptions used) changed considerably from the initial consultation paper to the final policy statement (PS18/X) issued in March this year. Alas, that has not happened, and it is primarily due to the way it has been implemented by the FCA. However, you would assume a good starting point would be to have clear parameters and assumptions to use in the TVC calculation, laid out within the rulebook. Different software copes to different degrees with being able to model the wide variety of defined benefit pension schemes. It is meant to be a very prescribed calculation with the stated expectation that whatever pension transfer analysis system the adviser used, the TVC would produce a consistent figure.Īs a firm who have been involved in pension transfer analysis software since 1992, we knew that was a very unlikely outcome. The FCA stated in their consultation last year (CP17/16) that consumers did not understand the value of the benefits being given up from a defined benefit pension scheme and felt the TVC was a more graphical “in your face” approach to highlighting this. It has now been three weeks since advisers have had to start including a Transfer Value Comparator (TVC) when advising on a DB pension transfer. Jason Wykes, Managing Director at O&M Pension Solutions explains some of the uncertainties around the TVC calculation to be used in defined benefit (DB) pension transfer advice. ![]()
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