Regulator lifts pension exit ban

Transfers have been banned since February

A ban on transfers from final salary work pension schemes has been lifted by the pensions regulator.

In February, the Occupational Pensions Regulatory Authority (Opra) temporarily banned transfers, to protect under-funded schemes.

The lifting of the ban coincides with new rules for calculating transfer values, which will take into account the current funding of the scheme.

The move is aimed at protecting the funds of all members of the scheme but will result in lower transfer values.

Ban lifted

In February, Opra said it would not penalise trustees who declined to offer calculations of transfer values, where it would prejudice the interests of remaining members.

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In practice, this meant trustees could refuse to give a member a valuation of their pension fund, without which they could not transfer funds to another employer's scheme or to a personal pension.

Opra said trustees could now recommence the issue of statements to members who have made valid request.

It said that, in the majority of cases, particularly where a request was made by a member in the three months before 4 August 2003, it should be possible for trustees to provide statements well within the six month time limit.

Lower values

Under new regulations, transfer values will be calculated differently to protect the interests of members.

Trustees will now calculate the transfer value on the ability of the company scheme to pay out to all workers, not just according to a minimum standard.

"Trustees will now be in a position to adjust the transfer value in a scheme that is fully funded according to MFR [Minimum Funding Requirement] but would be under-funded on an ability to pay out, " a spokesman for the Department for Work and Pensions told BBC News Online.