Software provider O&M Systems has launched a new transfer value comparator (TVC) tool to support advisers in the defined benefit (DB) transfer market.
The tool will provide advisers with three reports: a client facing report containing the mandatory TVC, which runs to eight pages; an adviser/file report, containing all the technical data a pension transfer specialist might need to support their recommendation; and a client-facing retirement-modelling report, which compares the options for the client, such as remaining in the scheme or transferring out, if applicable.
The first two reports are available in O&M’s entry-level ‘essentials’ package, so existing users can access the TVC functionality without any additional charge. The third report, meanwhile, is available as part of O&M’s ‘professional’ system.
The TVC is part of the recent regulatory changes brought in by the Financial Conduct Authority (FCA). In October, the appropriate pension transfer analysis (APTA), alongside TVC, replaced the existing transfer value analysis system in the defined benefit pension transfer process.
The APTA element of the process compares the benefits and options available under the proposed arrangement with the benefits from the current arrangement, while the TVC shows a comparison of cash equivalent transfers and the estimated cost of acquiring the same promised income in a defined contribution scheme.
O&M managing director Graham Miller said: “The requirements for TVC and APTA were introduced in October 2018 and it was clear to us that adding a TVC to an already lengthy TVAS report does not create an APTA. It simply leaves you a hugely complex report that isn’t client friendly.”
“At no point has the FCA stated that cashflow modelling is a mandatory requirement, although it is hard to see how a compliant APTA case can be built without it.”