From The Pensions Regulator:
A ‘cash equivalent transfer value’ is normally the expected cost to the scheme of providing the member’s accrued benefits. This value requires assumptions to be made about the future course of events affecting the scheme and the member’s benefits – factors including investment returns, mortality rates and inflation rates.
The guidance aims to help DB scheme trustees understand and fulfil new responsibilities being introduced in regulations by the Department for Work and Pensions. From 1 October 2008, it will be the responsibility of the trustees to take the decisions on which the calculation of cash equivalent transfer values is based.
The regulator’s draft guidance provides suggestions of good practice on the calculation of CETV, including calculations for schemes in wind up and dealing with enquiries in a PPF assessment period, and em…