Press releases

Deloitte draws up Trustee “checklist” ahead of April 6th changes

One week to go until “Freedom & Choice in Pensions” come into force

30 March 2015

A week ahead of a major pensions shake up, Deloitte today draws up its final checklist for pension scheme Trustees to ensure they are fully prepared for the new legislation.

Greg Morris, pensions director at Deloitte, states: “Since George Osborne first announced pension freedoms for the UK in 2014’s Budget, Trustees have been looking at how they will implement these into their scheme, whilst managing scheme member expectation and navigation through the changes.”

Implementing within a timeframe that is already tight, this month has seen the possibility that current annuitants may also be granted similar freedoms, extending both the requirements and offerings of pension schemes.

Morris added: “Whilst it is not a requirement for pension schemes to offer any of the Chancellor’s new flexibilities, at the very least there are aspects of the legislation that must be complied with. Crucially, this affects both DB and DC schemes.”

Deloitte’s 7-point checklist for Trustees:

Consult with employers on issues such as the cost to set up and administer new pension options, to determine the amount of flexibility to be granted to scheme members, and what defined benefit de-risking strategies the employer may wish to implement.

Communications to members should cover the latest changes and the degree of flexibility their pension scheme will offer. Frequent communications will be required throughout the implementation phase.

Scheme administration should be reviewed, particularly around new minimum requirements to signpost members to the guidance guarantee during their retirement process. Similarly, another requirement seeks to ensure members are properly instructed to find Independent Financial Advice at the appropriate time. New pension flexibilities may have additional administrative complexities and costs.

Seek legal advice on issues arising from the Freedom and Choice changes. Conduct a review of the Trust Deed & Rules which may unearth amendment requirements, and consider the implications of the statutory overrides.

Actuarial advice changes will be applicable for DB schemes specifically, and centre on cash equivalent transfer values (CETV) calculations. The basis of these should be reviewed and its consistency with cash commutation factors within the scheme considered. Seek advice on whether CETVs should be reduced, by what level, and whether the employer is willing to support payment of full CETVs. Other considerations include the Code of Practice on DB-DC transfers and conversions, as well as the impact on scheme funding.

Benefit options

  • DC Schemes: A final decision should be made as to the flexibilities offered within the scheme, including a review of annual benefit illustrations to reflect the new freedoms. The process of notifying and recording should also be considered when the Money Purchase Annual Allowance is triggered.
  • DB Schemes: As a minimum regulatory requirement, receipt of Independent Financial Advice must be confirmed and recorded before CETV completion. Additional, and optional, considerations include whether CETVs should be provided as part of the retirement process, or whether individuals may take a non-statutory CETV at normal retirement as part of their standard scheme options.

Investment strategy

  • DC Schemes: A review should be taken of the default investment strategy, as well as the lifestyle strategy and switching period, to assess their appropriateness. The range of investment funds available to members should also be a consideration both pre and post “retirement” age.
  • DB Schemes: The investment strategy here should take into consideration the membership profile of the scheme which could change rapidly, and DB CETV requirements in response to possible liquidity and disinvestment issues. Ongoing trends should be monitored in this regard for future investment strategy reviews.


Notes to editors

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

Fern Hammond
Deloitte LLP
+44 020 7303 2329


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