COVID-19: DC pension transfers where investment is gated

• The Regulator appreciates trustees will have difficulty in paying a cash equivalent transfer value (CETV) from a DC arrangement where all or part of the member’s pot is held in a gated fund.  However, the Regulator believes that it is not permitted to extend the time period for payment of a CETV in these circumstances.
• The Regulator still expects trustees to do everything possible to process the transfer request promptly and comments that it may fine trustees who fail to take all reasonable steps to pay the transfer within six months of the application date.

Where only part of the member’s pot is held in a gated fund, the Regulator suggests exploring whether a partial transfer could be paid, with money from the gated investment following once restrictions are lifted. 

Key Dates

The Pensions Regulator updated its COVID-19 guidance on DC scheme management and investment on 11 January 2021.

Authored by the pension team