Drawdown to drawdown transfers and stakeholder discounting rules

Wildparaplanner

Hi,

I keep getting this issue bounced at me and I can't point to concrete evidence.

My understanding is that a full FAD to FAD transfer does not require a need to discount a stakeholder or workplace scheme as it's essentially already a retirement product and therefore doesn't meet the definition under cobs 19.2?

Am I mistaken and you do have to discount it? If so why? If not, what can i refer our compliance team to say you don't?

Thanks
Wild

les_cameron

A drawdown is still a personal pension (just one that has been varied to allow withdrawals).

Are there actually stakeholders that allow drawdown? That should be easy enough to discount!

Wildparaplanner

Aviva's one actually does, but it's heavily restricted on how you can take withdrawals - can only be ad hoc and not on a regular basis. They also won't accept drawdown transfers in. Feels like Aviva have shot themselves in the foot here a little...

benjaminfabi

COBS 19.2.2

When a firm prepares a suitability report it must:

(1) (in the case of a personal pension scheme), explain why it considers the personal pension scheme to be at least as suitable as a stakeholder pension scheme;

Doesn't matter what state of play the pension is in, if you are recommending a personal pension, you must comply with the above rule. One day I'm sure someone will realise that it needs to be changed or removed. But until then it's a simple paragraph that needs putting in every pension recommendation report.

At least you don't need to discount the workplace pension too!