PENSION TRANSFERS YOUR RESPONSIBILITIES AND HOW OUR SERVICE CAN HELP FOR FINANCIAL ADVISERS ONLY OUR TRANSFER VALUE ANALYSIS (TVA) SERVICE PROVIDES SIGNIFICANT VALUE TO ADVISERS Arranging a TVA report can be very complex and time-sensitive, so a thorough understanding of final salary schemes is required before embarking down this route. We have been offering a TVA service (TVAS) to financial advisers for over 20 years. The TVAS team currently consists of 10 members, with over 40 years’ combined TVA experience, 60 years’ defined benefit pensions experience and a range of qualifications between them. They use their experience and familiarity with defined benefit (DB) schemes to: • help you understand what’s needed to produce a report by providing a checklist for you to use • interpret and vet the data to ensure that accurate information is input so you and your client get a reliable, high-quality TVA report • help with general guidance and any TVA queries you may have • provide a quality TVA report as quickly as possible – targeted with a 10 day turnaround. REQUEST YOUR TVA REPORTS FULLY ONLINE Using PROMPT , our online submission tool, you can request TVA reports and send paperwork straight to our TVAS team in a matter of minutes, without leaving your desk. The process is quick and efficient, saving you and your business time and effort. HOW MUCH DOES A TVA REPORT COST? In line with the FCA’s position on the supply of TVA services, we make a charge for the production of a TVA report. The cost is £150 + VAT per report charged by an invoice which we will send to you in the month after the report has been issued. THE TVA REPORT FROM 1 OCTOBER 2018 The TVA report meets many of the new regulatory requirements from 1 October 2018 when considering whether a DB transfer should go ahead or not. It is important to understand how our TVA service can help you and what else you will need to do to complete your assessment and make your recommendation. WHAT’S INCLUDED IN OUR TVA REPORT? • The Transfer Value Comparator (TVC) – on the single basis prescribed by regulation. • Critical yields for annuity purchase on a variety of different bases (single life, joint life, full pension, cash and reduced pension, at normal and early retirement ages, level escalation in payment as well as increases in escalation with a guaranteed period). • It looks at the likely pattern of benefits that might be taken from DB, defined contribution (DC) and annuity arrangements. It considers full pension and cash and reduced pension at normal and early retirement ages. It does this on a compare- and-contrast basis. • It undertakes any comparisons of benefits and options consistently. • It plans for a reasonable period beyond average life expectancy. • It considers how each arrangement would provide death benefits on a fair and consistent basis, primarily considering death benefits pre-retirement. • It uses rates of return and other standard assumptions prescribed by regulations. • It ensures consistency in the rates of return assumptions taking into account other assumptions, such as inflation. • It uses published population statistics, which allow for mortality improvements. • It provides a balanced and objective presentation of the Pensions Protection Fund. • It takes into account all charges (including adviser charges) where prescribed by regulations. Prepared For Mr C Yield 23 August 2018 Page 5 Prepared by Emma Dumper Old Mutual Wealth TRANSFER VALUE COMPARATOR You have been offered a cash equivalent transfer value of £787,000 in exchange for you giving up any future claims to a pension from the scheme. Will I be better or worse off by transferring? x We are required by the Financial Conduct Authority to provide an indication of what it might cost to replace your scheme benefits. x We have done this by looking at the amount you might need to buy the same benefits from an insurer. It could cost you £1,261,324 to obtain a comparable level of income from an insurer. This means the same retirement income could cost you £474,324 more by transferring. Notes 1. The estimated replacement cost of your pension income is based on assumptions about the level of your scheme income at normal retirement age and the cost of replacing that income (including spouse's benefits) for an average healthy person using today's costs. 2. The estimated replacement value takes into account investment returns after any product charges that you might be expected to pay. 3. No allowance has been made for taxation or adviser charges prior to benefits commencing.