Cymraeg

Block Transfers

General FAQs on the 2009/10 levy

Schemes are expected to notify us, by 5pm on 7 April 2009, of any material block transfers that are taking place up to 31 March 2009. Schemes then have until 5pm on 30 June 2009 to report the detail, provided we are notified a transfer has taken place by 5pm on 7 April 2009.

A full block transfer is defined as one of 100 per cent of assets and liabilities, resulting in the transferring scheme becoming ineligible

A material block transfer is where a pension scheme has made a transfer of the greater of:

a) 20 per cent of the asset value of either scheme as defined in the last MFR or section 179 valuation prior to the first transfer; and
b) £20 million.

In addition, schemes may choose to advise us of smaller block transfers – provided these are more than 5 per cent of assets or at least £1.5million. The same timescales apply.

Reporting can be in one of two ways:

By submission of a section 179 valuation as part of a Scheme Return;
By submission of a two-part “Certificate of valuation results on a section 179 basis following a material transfer” by the required deadlines shown here.

Please refer to our Guidance for Calculating and Certifying Block Transfers for further information.

Including block transfers in the levy for 2009/10 and 2010/11
Full block transfers reported by the time limits will be taken into account in the 2009/10 levy. Partial transfers reported this year (i.e. up to 30 June 2009) will be taken into account in 2010/11.

Partial block transfers that took place on or before 31 March 2008 will be carried forward for use in the 2009/10 levy, provided they were correctly certified by the 2008/09 deadline.

For 2009/10, if schemes fail to submit certificates for full transfers, the levy for the receiving scheme will be calculated using the valuations of both schemes involved, but the transferring scheme’s asset value will be reduced by 5 per cent in the transformation, as follows:

1) transform the transferring scheme’s assets and liabilities to the measurement date of 31 March 2008
2) reduce the assets by the greater of a) five per cent and b) 5 per cent per annum for the period from date of transfer to 31 March 2009
3) transform the receiving scheme’s assets and liabilities to the same date, then
4) add together the assets from 2) and 3)
5) add together the liabilities from 1) and 3).

A similar approach is expected to apply in the 2010/11 levy, in relation to material partial transfers occurring before 31 March 2009. This will mean that it is beneficial for schemes to have notified any material partial transfers by 7 April 2009 that occurred before 31 March 2009, and to have reported on the detail by 30 June 2009.

What do I do?
By 5pm on 7 April 2009, make sure you provide the name and Pension Scheme Reference number of the transferring scheme and the receiving scheme(s), the date of the first transfer payment, the date of the last transfer payment and the amount of assets transferred; and

By 5pm on 30 June 2009, you should provide the remainder of the information specified in and calculated in accordance with the provisions set out in Annex A attached to the 2009/10 Determination

Certification of these documents must be done using the Pensions Regulator’s Exchange system. Separate certification to the PPF is no longer necessary or possible.

How can I ensure that deficit reductions made to a scheme that has undergone a block transfer are appropriately reflected?
If the assessment is carried out at an earlier date, then the actuary can fill in an actuarial certificate for deficit reduction contributions, reflecting only those contributions that occurred after the effective date of the assessment reported in the block transfer certificate. It is acceptable for the valuation referred to in the actuarial certificates to be the block transfer assessment, rather than a formal valuation.