Institute and Faculty of Actuaries commends Industry Working Group's Code of Good Practice to its members08 June 2012
The Institute and Faculty of Actuaries is supporting the new Code of Good Practice relating to Incentive Exercises, including Enhanced Transfer Values (ETVs) which was published today by an Industry Working Group, which included the Institute and Faculty of Actuaries, the NAPF, the ABI and the Department for Work and Pensions (DWP).
Alan Howard, spokesperson for the Institute and Faculty of Actuaries, sat on the steering committee responsible for overseeing the development of the Code. He comments:
“ETVs are a relatively new phenomenon and therefore regulations and complete guidance have until now been lacking and this concerned our members. The Institute and Faculty of Actuaries shared these concerns and participated from the outset with the DWP to help shape a practical code of good practice for those involved in incentive exercises, including ETVs and we are commending the Code to our members because it sets out an agreed best practice for the first time.
“This is a voluntary Code that we believe represents a practical step forward, helping to protect pension scheme members, and also practitioners and others that are involved in running pension schemes.
“Widespread adoption of the Code, together with the recent changes in Pension Transfer Analysis Assumptions from the FSA which regulates the advice given to individuals offered ETVs and other incentives, will lead to better outcomes for individuals who are offered transfers from final salary schemes.
“Providing people with the right information in a language that they understand and with the support that they need to make an informed decision is vital. Adoption of the Code will mean that individuals will have this and should be able to make a decision that is right for their particular circumstances.
“However the issue of pension costs is not going away and remains a concern for employers with final salary scheme. The Actuarial Profession will continue to work with trustees and scheme sponsors to find workable solutions to these concerns that will be in the interests of all.”
- Incentive exercises for pensions. A code of good practice
- Incentive exercises for pensions. Practitioners' notes to accompany the code of good practice
Jpeg image of Alan Howard available on request.
- Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.
- Members of the Profession have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.
- The Profession is governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of the Profession in society.
- The Profession is available to provide expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions