If we can’t measure CETV take up, how can we manage it?

druckerThere’s a well known phrase “if you can’t measure it, you can’t manage it”. The Government can’t measure the extent of DB transfers and I conclude that they can’t govern the transfer process until they do.



Here’s the Pensions Regulator’s go

First up, the Pensions Regulator published a transfer figure for 2017 of £14.7bn. I enquired how they came by this number and was told

  • The source of our data is the Annual DB Scheme Return.

  • We ask schemes to tell us the number and value of transfers as at the last reporting date (ie usually the latest reported annual scheme accounts)

  • The nature of the process therefore means that there is a time lag in the figures as they relate to the 12 months up to the scheme year end of last reported figure.

  • The 100,000 DB transfers of £14.3bn are the aggregate figures reported to us by schemes in 2018.

  • Typically they relate to the 12 month period up to scheme year ending 31st December 2016 or 31st March 2017 i.e. they can go back as far as January 2016.

  • As such the figures pre-date the spike in activity we see in the ONS survey figures.

In other words the 100,000- transfers and the £14.3bn transferred relates to 2016 and not to 2017.

But these numbers appeared in Professional Pensions rather differently

In response to a freedom of information request, TPR said DB pension schemes had reported approximately 72,700 transfers in the period from 1 April 2017 and 31 March 2018. It pointed out these transfers were not specifically into a defined contribution scheme, while the total value of those transfers was approximately £14.3bn.

and went on

“Taking into account non-responses, the regulator estimated the actual figure to be in the region of 100,000. This is a 25% rise on its estimate of 80,000 between 1 April 2016 and 31 March 2017.

“Not all schemes have reported on scheme transfers; though it is a requirement for a scheme to submit a completed scheme return, it is not a requirement to provide the number of transfers and therefore all supplied figures are indicative only.”

In other words, tPR does not measure transfer activity and relies on scheme returns for its rudimentary understanding of what is going on.

Let us now turn to the FCA who estimate that transfers in 2017 were £20.1bn

Here’s a thread from twitter with Paul Lewis in his usual scathing form, reporting on this numberPaul Lewis transfers

Paul picks up on the £20.8bn supplied to the FT by the FCA, but this figure is based on what IFAs are telling them.

If the FCA looked in the Barclays report and accounts they’d find that £4.2bn came out of that scheme alone. Put together three schemes – BSBPS, LBG and Barclays account for nearly £10bn of CETV transfers. I simply don’t believe that £20.8bn number – if it accounts for not 3 but 5700 DB schemes.

The true and fair number from the Office for National Statistics

If – rather than requesting incomplete data from the FCA and tPR, we’d turned to the source of all knowledge, the ONS, we’d come to a much larger number

ONS funds

£bn. 10 Includes the state scheme; transfers to personal pension schemes and any miscellaneous transfers.

The near tripling of transfers from 2016 to 2017 must surely reflect the impact of contingent pricing, which opened the stable door to this surge.

If anyone wants to check the validity of these figures, they can do so by contacting Fred NorrisFinancial.Inquiries@ons.gsi.gov.uk Telephone: +44 (0)1633 456109

Or they can go and look at the numbers themselves by accessing the spreadsheet (4.3) available on this link.

Not bad- much worse

Bearing in mind the FCA’s warning that over 50% of transfers sampled in 2017 were uncompliant and shouldn’t have happened, this suggests that what we saw last year is a much, much worse problem than anyone predicted.

What’s worse, we are still not owning up to the scale of the problem – that’s not just bad – it’s much worse!


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to If we can’t measure CETV take up, how can we manage it?

  1. Adrian Boulding says:

    Interesting. MQ5 appears to be a survey in which they ask 360 pension schemes (that’s 100 times as many as you asked Henry) drawn from the population of schemes they have contact details for which they believe is about three quarters of the total population of schemes

    So the search for a full answer of the scale of how many people are liberating themselves from DB must continue

    Keep shining the torch Henry!


  2. henry tapper says:

    The original version of this post (which I think you read) got jublified and only half published , I’ve reposted with most of the missing bits! Thanks Adrian

  3. Mark Meldon says:

    97,000 transfers! Bearing in mind the limited number of ‘pension transfer specialists’, how does that divide as case per regulated individual. Bearing in mind that in my experience it takes many hours of careful discussion, documentation and deliberation to even start to look at a DB/DC transfer, I can’t see how it can be done. Unless, of course, these advisers are using what my MP calls a ‘CP&BO’ (‘cut, paste and bugger off’!) approach?

    Also, how many DB transfers are Pension Sharing Order cases? I’ve seen six of these lately – do these get counted in with everything else?

  4. Richard Veal says:

    I think the article is a little one sided but perhaps that was the intention – to start a debate.
    With corporations eager to get pension liabilities off of their books and the attractive multiples on offer, now could be the ideal time to look closely at the deal on offer. Interest rates are highly likely to rise in the coming years and subsequently annuity rates will follow. It all seems like quite an attractive proposition for those clients willing to take on a little more risk with their pension pot and the freedoms that accompany a modern DC scheme

  5. henry tapper says:

    Buy now while stocks last! “The Port Talbot close” as one adviser calls it!

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