The Pensions Regulator (TPR) chief executive Charles Counsell has warned scheme trustees could see an increased demand for cash equivalent transfer values (CETVs) from DB members.
In a blog post published on Tuesday (26 May), Counsell said coronavirus could cause two major problems for scheme trustees - CETVs taking longer than usual and more people requesting them.
Due to the heightened interest in CETVs and the process taking longer, Counsell said trustees may want to take advantage of flexibility in legislation that allows up to three months to issue CETV quotations for reasons outside of their control.
Additionally he said no enforcement action would be taken against trustees who were unable to meet a statutory deadline or make a transfer payment because of Covid-19-related issues.
The chief executive said Covid-19 could "see savers rush into decisions about their pensions… [that]... they may later regret, or worse still become the victims of scammers."
As such, Counsell said TPR had asked that if a member requests at CETV quotation, trustees send them a letter with their valuation, warning them such a move may not be in their best interests, and urging them to think carefully.
Counsell's comments come after Lane Clark and Peacock (LCP) recently said the easing of the UK's ‘lockdown' could mean a steady rise in defined benefit (DB) transfers, as the ‘lockdown effect' on the sector weakens.
Analysis by LCP found a sharp decline in inquiries at LCP schemes following the nationwide lockdown at the end of March, but more recent data from early May suggests a possibility that demand will grow over the coming months as financial pressures lead more over-55s to seek to access their pension funds.
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