Pension Transfers &

Planning Advice

Examinable from January 2022

© Chartered Institute for Securities & Investment
Pension Transfers & Planning Advice: Syllabus (Version 6)
 Aims

The aim of this stand-alone examination is to provide candidates with the knowledge
and skills required to undertake the activity of pension transfers when combined with
an appropriate RDR compliant qualification.

Assessment Structure
A 3–hour paper divided into three sections:

SECTION A: This section will carry 20% of the marks.

- candidates answer ALL parts of the multiple-choice questions in this section.

SECTION B: This section will carry 40% of the marks.

- candidates answer ALL parts of the short answer questions in this section.

SECTION C: This section will carry 40% of the marks.

- candidates answer ALL parts of the two 20-mark questions

Reading List
At the end of this syllabus we have supplied a reading list. Candidates attempting
this examination are strongly advised to relate their reading to practitioner
experience. Candidates who read more widely and can draw on this broader
context fare better in higher, post-graduate level examinations of this nature, where
both breadth and depth are required.

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Section 1 Pensions Planning and Advice

On completion, the candidate should:

Apply the key principles of auto-enrolment

• the assessment process

• postponement

• phasing

• cyclical re-enrolment

• default and deferring issues

• transfers of information

• National Employment Savings Trust (NEST)

• benefits and disadvantages of workplace pensions and auto

enrolment

Demonstrate the main rules governing the tax treatment of income

and pensions by using calculations

• employee taxation (including allowances)

• employer taxation: incorporated and unincorporated employers,

effect of making pension contributions

• special considerations for shareholding directors; the choice

between salary and dividends

• registered pension schemes (including allowances, eligibility,

relief, and benefit types and limitations)

• tax position of pension funds, and the taxation of different

classes/types of asset

• taxation of pension benefits – state benefits, occupational and

personal pension schemes

• transitional protection

• tax management, including minimisation of future tax liability

when in retirement

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Explain the main state pension benefits to which an individual
and/or their dependant(s) may be entitled to in retirement, and the
impact this may have on retirement planning

• benefits and disadvantages of state pension benefits

• identifying existing pension provision from state and private

sources – Department for Work and Pensions (DWP)
projections

Evaluate the principles and rules governing defined benefit pension

schemes, and how these can influence retirement planning

• public sector schemes and structures

• pensions and life assurance benefits

• roles and requirements of employers and pension scheme

trustees

• position on early retirement and reduction in benefits

• early leavers and transfer values

• triviality

• small pot lump sums

• funding and investment issues of defined benefit schemes

• private sector schemes: funding requirements, accounting

standard FRS17 and IAS 19, employees’ financial security and
risk to defined benefit pension benefits

• death in service

• closure and winding up of schemes – main implications

• The Pension Protection Fund, Financial Assistance Scheme and

employer covenant

• advice issues – pension opt-outs, transfers and early leavers,

added years AVCs vs. money purchase AVCs

• Snowdon code and how its conducted

• benefits and disadvantages of defined benefit schemes

• defined benefit scheme benefit statements

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Evaluate the principles and rules governing defined contribution
pension schemes, how benefits are built up, and impact on
retirement planning and the advisory process

• basic structure of defined contribution occupational and

personal pension schemes

• main roles of employers and pension scheme trustees, and

importance of scheme rules

• nature and operation of group personal pension schemes

• income tax computations and relief for employee contributions

• tax relief on employers’ pension contributions

• employee contributions, AVCs and FSAVCs

• death benefits, ill health and serious ill health before

crystallisation of retirement benefits

• assessing how much to invest, the client’s investment risk

profile, and affordability

• FSCS protection

• benefits and disadvantages of defined contribution occupational

pension schemes, cash balance schemes, personal
pensions/stakeholder pensions

• statutory money purchase illustrations

Evaluate the investment approaches typically adopted by pension

funds to provide income and capital in retirement

• asset classes – risks, returns and past performance

• asset allocation – timescale, relation to other assets, client

attitudes, (life styling, glide path)

• self-investment under registered pension schemes

(occupational and personal) – main rules, tax implications,
characteristics and opportunities

• accumulating funds for retirement – investment strategies, asset

allocation and timescales

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Evaluate the main criteria for selecting pension contracts and
providers

• main types of defined contribution schemes and their relative

merits

• pension provider costs, administration and financial strength

• fund choice: risk, glide path, default funds

• self-investment options

Evaluate the main options for drawing retirement benefits for

individuals with defined contribution schemes:

• normal minimum pension age, effect of ill health, longevity risk,

minimum decumulation age

• maximum tax-free pension commencement lump sum

• main types of annuity: secondary annuity market

• uncrystallised funds pension lump sum (UFPLS), crystallisation

funds, pension lump sum

• flexi-access drawdown and safeguarding benefits

• scope of Pension Wise service (part of The Money & Pensions

Service (MaPS))

• other sources of income in retirement

Evaluate the suitability of registered pension schemes and other

types of investments, including residential property, which may be
used to provide retirement benefits:

• tax treatment, accessibility, allowances, risk, availability and

cost

• risks associated with unregulated pension schemes and scams

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Section 2 Pension Transfer Advice
On completion, the candidate should:

Apply specific FCA rules and guidance to the planning

and advisory processes of pensions transfers:

• Section 19.1 Pensions conversions, transfers and opt-outs

• Section 19.7 Retirement risk warnings

• other COBS 19 rules relevant to pension transfers

Explain how the Cash Equivalent Transfer Value (CETV) is

calculated and what factors can affect it:

• The Pensions Regulator (TPR) rules, responsibilities, voluntary

codes and due diligence requirements applicable to pensions
transfers

• trustee responsibilities

• scheme transfer checklists

• scams

Explain the origins and application of permission required to

conduct transfer/pension conversion business, including:

• When a Pension Transfer Specialist must be engaged, and

exceptions to this

• Safeguarded Benefits

• Appropriate Pension Transfer Analysis and its implications

for advisers and clients

• transfer value exercises management

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Explain pension scheme solvency issues and main regulatory
interventions impacting on the pension transfer process, including
disputes:

• Pension Protection Fund

• The Pensions Ombudsman

• Impact of solvency on the transfer value

• Order of priorities for drawing benefits from a scheme with

solvency issues

Explain the regulatory impact of transfers to and from overseas

pension schemes:

• qualifying rules

• HMRC rules and tax implications

• FCA requirements for overseas customers and parties involved,

including regulated individuals in the UK and overseas

Explain the roles and responsibilities of those involved in the

pension transfer process including:

• Pensions Wise (part of The Money & Pensions Service (MaPS))

• the motivation for transfer (including pension unlocking)

• reasons for advice given

• ABI estimated time standard

Explain the role and responsibilities of a pension transfer specialist

and the key stages of the pension transfer process including
timescales:

• client objectives and restraints, regulatory restrictions

• retirement strategy to meet client objectives
• implementation of retirement strategy
• responsibility for post-transfer review and control

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Establish the growth and income objectives and expectations of a
client seeking to transfer their pension, including an assessment of
their current and future financial obligations, plans and objectives,
their attitude to risk and capacity for loss

Explain the principles of APTA and the TVC

Explain the principles / shortcomings of TVAS, how critical yield

may be achieved, and what factors can affect critical yield

Explain re-organisations, block transfers and windings up, including:

• Transfer of Undertakings (Protection of Employment)

Regulations 1981;

• protected entitlements

• reporting requirements

• notification periods

• potential conflicts of interest

Analyse the implications and impact on the pension transfer

process of:

• transferring, converting or opting out of the following types of

pension scheme, including insolvency risk:

money purchase/ defined contribution

final salary/ defined benefit

public sector

• transitional issues:

primary protection

enhanced protection

protected transfers

tax free cash

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Apply the rules relating to pension transfers impacted by divorce:

• shadow benefits in the event of divorce

• implications of pension sharing and impact on the transfer

• pension sharing versus attachment orders

• the differences between UK legal systems relating to pensions

and divorce/dissolution

Evaluate key components of an existing pension scheme from a

transfer perspective:

• workplace pensions

• benefit crystallisation option: phased income/retirement;

flexi access drawdown; annuities – including guaranteed
rates, recycling rules and transfers for immediate vesting

• alternative retirement vehicles

• final salary schemes

• career average schemes

• public sector transfer club

• trusts – impact on trust if transfer carried out

• death in service

• impact of dependants’ benefits on a personal pension scheme

Analyse the implications of incentive exercises to leave a final

salary scheme:

• implications of incentive exercises to leave a final salary scheme

• impact on APTA reporting and way in which pension transfer is

reported

• motivation of employers to offer such incentives

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Explain the rights and options of pension scheme leavers, including:

• transfer value

• ill health, disability and other forms of benefits

• early retirement benefits

• deferred benefits

Analyse income options and their impact on a pension transfer

recommendation:

• product/solution styles

• difference between retirement options

• maximum benefits – tax-free cash etc

• risk and return

• analysis of output for types A & B critical yield in drawdown

cases

• mortality drag

• flexibility

• comparison of features on income drawdown

• effect of transfer on income drawdown

• added years’ purchase

• life expectancy risk

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Analyse how pension returns and options are related to a
combination of investment risk and capital risk:

• inflation and investment returns – nominal and real

• the effects of inflation

• the time value of money

• the impact of varied retirement returns

• risks associated with each retirement option

• the appropriateness of indexation

• the appropriateness of including dependants’ benefits

• the appropriateness of incorporating capital protection on death

• the appropriateness of including guarantee periods

Analyse and evaluate the advantages and disadvantages of a

pension transfer in a range of given circumstances

Analyse and interpret a range of financial circumstances and

retirement options in order to prepare recommendations to meet
client objectives

Apply suitable pension transfer solutions in a range of given

circumstances, demonstrating the principles of best practice and
reinforcing the Know Your Customer process

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Section 3 Financial Protection
On completion, the candidate should:

Evaluate the need for financial protection when retirement planning

and explain the relevant factors when selecting appropriate
solutions:

• life policies, features and uses;

• comparative costs, benefits and disadvantages;

• the use of trusts;

• determine suitability of product types and options

Analyse and establish current and future protection needs:

• planning in real terms

• identify priorities

• adjusting for life events

• health and care needs in later life.

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Section 4 Personal Taxation
On completion, the candidate should:

Assess the taxation of a range of investments and products from a

retirement planning perspective:

• direct investments within the main asset classes

• indirect investments:

pension schemes

Individual Savings Accounts (ISAs)

onshore and offshore collectives and investment companies

onshore and offshore life assurance policies

Real Estate Investment Trusts (REITs) and other investment

funds

Venture Capital Trusts (VCTs), Enterprise Investment

Schemes (EISs) and Seed Enterprise Investment Schemes
(SEISs)

property

Analyse the role and relevance of tax in the financial affairs and
planning requirements of individuals and trusts:

• impact of taxes on the investments of individuals and trusts

• planning for spouses, civil partners, children and family

members

• pension contributions, ISA allowances, main CGT exemptions

and reliefs

• IHT mitigation: lifetime gifts and trusts

• Wills, will trusts and intestacy

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Specify the inheritance tax implications of trusts:

• potentially exempt transfers

• chargeable lifetime transfers

• periodic charges

• exit charges

• tax rates

• exemptions and reliefs

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Section 5 Retirement Planning and Advice
On completion, the candidate should:

Analyse a client’s specific circumstances in order to evaluate

potential recommendations for retirement planning, paying
particular attention to:

• current and future client circumstances and plans, including

health, employment and lifestyle

• current and future pension provision, investments, assets and

other sources of wealth

• financial outgoings, debts, financial protection and other

obligations

• determining needs at retirement and after retirement

• affordability and suitability

• appropriate fit with the client’s attitude to risk and capacity for
loss

• ethical investment preferences

• other information pertinent to the suitability of recommendations

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Review and assess key considerations regarding retirement
planning and provision:

• alternative investments

• age/retirement date

• contribution levels

• investment options

• flexibility

• providers and charges

• benefits

• impact of pre- vs. post-retirement asset allocation

• significance of job changes

• divorce or dissolution of Civil Partnership, including issues

surrounding shadow benefits, pension sharing, and attachment
orders

Analyse and establish the income and capital required to achieve

current or future objectives, needs and the timescale(s) applicable,
taking into account:

• existing assets or capital

• reasoned and reasonable assumptions

• state benefits and contributions

• taxation considerations

• appropriate mortality and morbidity risks

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Develop and implement a plan to meet the client’s financial
objectives for retirement by:

• formulating recommendations to meet client objectives;

• prioritising needs for growth or income

• identifying time horizons

• reviewing existing provision for retirement and financial

protection

• assessing impact of taxation

• comparing charges

• determining diversification, asset allocation and correlation

requirements

• management of financial liabilities (mortgage, loans and credit

debt)

• protecting against inflation

• selecting appropriate financial products and solutions

• constructing and revising the plan to meet the client’s

requirements

• quantifying future retirement needs in advance

Evaluate appropriate and effective retirement planning strategies,

ensuring that the optimal retirement planning strategy meets the
client’s stated objectives as fully as possible

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Develop effective recommendations that meet the client’s needs
and objectives and are technically accurate, ensuring that the
following are fully taken into account:

• taxation

• social security benefits, where appropriate

• identified mortality/ morbidity risks

• consistency with the client’s agreed attitude to risk and capacity

for loss

• affordability based on the client’s agreed cash flow/expenditure

pattern

• consistency with client’s stated needs and objectives

• technical accuracy

Apply high standards of professional advice on pensions, retirement

products and retirement planning, having awareness of:

• professional integrity and behaviour

• regulatory requirements

• consumer rights legislation

• factors that influence the way in which recommendations are

presented

• the need to explain the consequences of inadequate provision

to clients

• the importance of periodic review meetings for retirement

planning

Pension Transfers & Planning Advice: Syllabus (Version 6)

 State and explain any relevant implications of recommendations,
including:

• qualifications and / or caveats

• limitations

• legal/taxation conditions or contingencies

• consequences

• requirements for implementing, maintaining and reviewing

recommendations

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Assumed Knowledge
Candidates will also be assessed on other matters on which a pension transfer and
planning adviser may be consulted and, in doing so, will be assessed on their ability to
draw on any of the subject matter covered in the UK Regulation & Professional Integrity
unit; the Investment, Risk & Taxation and the Financial Planning & Advice unit of the
Investment Advice Diploma (or equivalent). Some of the knowledge that candidates will
be assumed to have is outlined below – please note this is not an exhaustive list.

Financial Protection
Evaluate a range of key factors, trends and requirements for financial protection as part
of retirement planning:
• consumer attitudes and behaviours to protection needs planning
• trends in health, longevity and mortality; employment; product design and
development
• priorities, risks and choices
• personal and family income and capital protection needs
• relationship between insurance, and assets and liabilities
• business protection needs
• sources of financial protection, including State and mortgage repayment support

Assess the range, structure, features and application of life assurance and pension
based policies, income protection insurance and critical illness insurance to the
retirement planning process, including:
• types of policies; features and uses
• comparative costs, benefits and disadvantages
• definitions, exclusions, premium calculation factors
• additional benefits (where relevant)
• taxation treatment
• underwriting
• legal considerations
• use of trusts (where relevant)
• claims, assignments, surrenders, paid-up policies
• group policies

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Assess the range, structure and application of long term care insurance to the
retirement planning process:
• Regulatory considerations
• Political environment, social care policy, national factors
• Main product types and features
• Long term care planning factors:
o Cost and other factors, options and choices
o Available resources, impact and consequences
o Immediate needs provision
o Future needs planning
o Legal considerations; power of attorney
o Vulnerable clients

Assess the features and utility of other insurance based protection policies in the
context of retirement planning:
• Personal accident, sickness and unemployment
• Private medical insurance, hospital plans and dental insurance
• Payment protection insurance: mortgages and credit

Personal Taxation
Assess the scope and key regulatory considerations of personal taxation from a
retirement planning perspective, including liability, rates, reliefs and exemptions:
• Income tax
• National Insurance Contributions
• Capital Gains Tax
• Inheritance Tax and use of Trusts
• Stamp duty reserve tax / land tax
• Residence and domicile; impact on tax liability
• UK tax compliance, evasion and avoidance issues
• VAT and Corporation Tax (outline only)

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Trusts, Wills and POA
Explain the characteristics of trusts:
• concepts of settlor, beneficiary and trustee
• express, resulting and constructive trusts
• investment powers of trustees
• Trustee Act 2000
Explain the general principles of the following and their relevance to retirement
planning:
• legal persons and powers of attorney
• law of contract and agency
• wills and intestacy
Distinguish between the following types of trust and explain how they may be used for
tax and estate planning:
• bare trusts
• interest-in-possession trusts (life interest and revisionary interest)
• non-interest-in-possession trust (accumulation and maintenance trusts /
discretionary trusts)
• charitable trusts
Specify the income tax implications of trusts:
• interest in possession trusts
• non-interest in possession trusts
• bare trusts
• tax rates
• exemptions and reliefs
Specify the capital gains tax implications of trusts:
• the liability of the settlor and trustees
• tax rates
• exemptions and reliefs

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Reading List
Newspapers/Periodicals etc.
Financial Times and financial sections of other newspapers.
Note: Candidates should pay particular attention to weekend editions in which savings
and investment are frequently given specialist coverage.

Trade press
http://citywire.co.uk/new-model-adviser
http://www.pensionsage.com/pa/
https://www.professionalpensions.com/
https://www.moneymarketing.co.uk/

Also:
The Review (CISI)
The Asset Management Review
Retirement Outcomes Review
https://www.fca.org.uk/publications/market-studies/retirement-outcomes-review
Financial Conduct Authority Consultation CP 17 / 16 – Advising on Pension Transfers
Department for Work and Pensions – Consultation on valuing pensions for the advice
requirement and introducing new consumer protections
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/624974/g
overnment-response-valuing-pensions-for-the-advice-requirement.pdf

Taxation
Pocket Tax Guide
PWC; (PWC, annually)

The Daily Telegraph Tax Guide

Genders, D; (Kogan Page, annually)

Tolley’s Pensions Taxation 2016-2017

Ward, S; (Tolley)

Pension Transfers & Planning Advice: Syllabus (Version 6)

 General
Pensions Pocket Book
AON; (annually)

Rules to facilitate transfers

FCA The Perimeter Guidance manual:
https://www.handbook.fca.org.uk/handbook/PERG.pdf
FCA Conduct of Business Sourcebook rules (COBS) 19.1:
https://www.handbook.fca.org.uk/handbook/COBS/19/1.html
The Pensions Regulator Transfer values:
http://www.thepensionsregulator.gov.uk/guidance/guidance-transfer-values.aspx
The Pensions Regulator DB to DC transfers and conversions:
http://www.thepensionsregulator.gov.uk/doc-library/db-dc-transfers-conversions.aspx

Stages/evaluating client objectives and TVAS

FSA Pension transfers – who can do what and when?
www.fsa.gov.uk/smallfirms/resources/factsheets/pdfs/pension_transfers.pdf
The Pensions Advisory Service Transferring your pension:
http://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-
change/transferring-your-pension
The Pensions Regulator The employer’s covenant at a glance:
http://www.thepensionsregulator.gov.uk/docs/employer-covenant-at-a-glance.pdf

Critical yield/factors that can impact

FCA PS18/20: Improving the quality of pension transfer advice
https://www.fca.org.uk/publications/policy-statements/ps18-20-improving-quality-
pension-transfer-advice
FCA CP 17/16: Advising on Pension Transfers
https://www.fca.org.uk/publication/consultation/cp17-16.pdf
FCA PS16/12: Pension reforms – feedback on CP15/30 and final rules and guidance:
https://www.fca.org.uk/publication/policy/ps16-12.pdf
FCA CP 15/30: Pension reforms – proposed changes to our rules and guidance:
https://www.fca.org.uk/static/documents/consultation-papers/cp15-30.pdf

Pension Transfers & Planning Advice: Syllabus (Version 6)

 FCA CP15/7: Proposed changes to our pension transfer rules.
http://www.fca.org.uk/your-fca/documents/consultation-papers/cp15-07
FCA PS 15/12: Proposed changes to our pension transfer rules: feedback on CP15/7
and final rules:
https://www.fca.org.uk/static/fca/documents/policy-statements/ps15-12.pdf
FSA CP12/4: Pension transfer value analysis assumptions:
https://www.fca.org.uk/publication/consultation/cp12-04.pdf
FSA PS12/8: Pension transfer value analysis assumptions: feedback to CP12/4 and
final rules:
www.fsa.gov.uk/static/pubs/policy/ps12-08.pdf

QROPS
HMRC Pensions tax manual – international: contents:
https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm110000
GOV.UK Pension Tax for overseas pensions:
https://www.gov.uk/government/publications/pension-tax-for-overseas-
pensions/pension-tax-for-overseas-pensions
QROPS Specialists UK Budget 2017 and QROPS:
http://www.qropsspecialists.com/uk-budget-2017-qrops/

PPF/FAS/FOS
Pension Protection Fund
www.pensionprotectionfund.org.uk
Pension Protection Fund Financial assistance scheme:
www.pensionprotectionfund.org.uk/FAS/Pages/fas.aspx
Pensions Ombudsman
www.pensions-ombudsman.org.uk/

Transitional protection/lifetime allowance

GOV.UK Lifetime allowance:
www.hmrc.gov.uk/pensionschemes/pension-savings-la.htm
Royal London Tax-free cash protection on transfer:
http://adviser.royallondon.com/pensions/technical-central/information-
guidance/transfers/tax-free-cash-protection-on-transfer/

Pension Transfers & Planning Advice: Syllabus (Version 6)

 Zurich Transitional protection and transfers:
https://www.zurichintermediary.co.uk/_/media/dbe/uk-intermediary/docs/technical-
corner/128320.pdf
Prudential Enhanced protection:
http://www.pruadviser.co.uk/content/knowledge/technical-centre/enhanced_protection/
Prudential Fixed Protections 2012, 2014 and 2016:
http://www.pruadviser.co.uk/content/knowledge/technical-centre/fixed-protection-2012-
and-2014/?gsasro=1&gsaq=fixed%20protection
Prudential Individual Protection 2014 and 2016:
http://www.pruadviser.co.uk/content/knowledge/technical-centre/individual-protection-
2014/?gsasro=1&gsaq=individual%20protection
Prudential Primary protection:
http://www.pruadviser.co.uk/content/knowledge/technical-centre/primary_protection/

Websites
Students should regularly check investment web sites, such as:
www.pensionsadvisoryservice.org.uk
www.pwc.co.uk/pensions
https://www.out-law.com/
https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual
http://www.thepensionsregulator.gov.uk

© Chartered Institute for Securities & Investment

Pension Transfers & Planning Advice: Syllabus (Version 6)