APTA for DB Transfers

jenny.ryan

Hi Everyone
with October approaching fast I was wondering if people have got their heads around the APTA requirement for DB transfers as yet.... I'm just about there with the TVC chart, but until today I thought APTA was essentially the comparison/analysis you do in your suitability report... however I am now reading lots of references to an APTA cash flow.
I have referred to COBS 19 Annex 4 which does specify some rules about using relevant growth rates and ages, which makes sense. Are people generally continuing to use cash flow modelling on the same basis as you did before to satisfy the APTA cash flow? Or are you doing another one based on "FCA assumptions"?

Rory Percival's new DB guide has scared me a bit as it suggests that "you must not use a standard Cash flow tool for an APTA"!!

Would love to hear everyone's views on this one!

Thanks
Jenny

benjaminfabi

Hi Jenny,

I've not read Rory's guide, so I don't know the context of that quote, but you certainly don't have to use cash flow tools for an APTA and I don't see an issue with continuing to use one if you do. In my opinion, if you've seen the kind of output from selecatpension and O&M in the last couple of years, where they look at the sustainability of drawdown in various scenarios, then this satisfies the requirement of the APTA outside of any proper cash flow being used.

If you are using cashflow then I think you need to be fully aware of the assumptions, but I read it that there is no restriction on the growth rate in cash flow that there is for product illustrations (ie capped at the various low, mid and high rates). You just have to explain it, and be aware of the guidance in annex 4A G 2.

I genuinely don't see much changing, other than the TVC and some minor tweaks around wording to cover off the various bit referred to above.

Yonkers420

Hi Jenny,

This isn't a plug for Prudential (I dont work for them and we dont use them) but they are doing seminars up and down the country in September/October to run through the changes and give a general update on the DB space.

Might be worth having a look into.

DanAtkinsonUK

I've read Rory's guide too. In general it is helpful, but do remember that much refers to the consultation paper as opposed to the policy statement. So do check COBS yourself too - and set it to show the rules applying from October (https://www.handbook.fca.org.uk/handbook/COBS/19/1.html?date=2018-10-01).
I don't think there is any difference between normal cashflow and what is prescribed - unless you are doing stocastic modelling. The annex seems (to me) to be about how you get to the projected income figure.
APTA could pretty much be described as "do proper financial planning" - in my opinion i.e. take everything into consideration and take the path of least risk. For me the TVC is the trickier bit as will need some context given to it due to the assumptions being different and not client specific.
I'm looking forward to tomorrow's PowWow session with Chris Hewitt from the FCA.

benjaminfabi

"APTA could pretty much be described as "do proper financial planning""

Love this

DanAtkinsonUK

Then you'll love this that is going in a briefing i'm drafting! This is in the section talking about what is going in the SR rather than the file.

"The document is not meant to educate the client to the level that they could take and pass the Pension Transfer Specialist qualifications."

jenny.ryan

hi all

thanks for the feedback, I am reassured! Dan I had the same view as you on APTA but think I got myself a bit of a panic.
Yonkers do you have a link for those events? would be keen to check it out but Google isn't giving me anything!
thanks everyone

Yonkers420

Hi Jenny,

if you email at megan.cormack@prudential.co.uk she should be able to provide details to the seminar nearest to you

richallum

Chris has seen this thread and will cover it in his talk tomorrow.

jenny.ryan

Thanks Yonkers, there is actually a date in Aberdeen! unbelievable...! Looking forward to hearing how the Powwow discussion goes! J