Overview

Following consultation, the Pensions Regulator (Regulator) this month issued its revised guidance on transfer incentives. This will replace its inducement offers guidance published in January 2007.

The guidance repeats the concerns previously expressed by the Regulator that some employers may be misleading members when undertaking incentive exercises.

The Regulator defines an incentive exercise as one where a sponsoring or associated employer of a defined benefit scheme seeks to remove some or all of its liabilities by persuading members to transfer or modify benefits in return for a financial incentive.

Given the Regulator’s concerns, the guidance sets out five key principles with which employers should comply in order to make and communicate an effective incentive offer:

• Clear, fair and not misleading
• Open and transparent
• Manage conflicts of interest
• Trustee consultation
• Independent financial advice

Eversheds discusses the key five principles in depth.

To read more click ‘view briefing’.