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Amend Incentive Exercises

Types of incentive exercise

Enhanced Transfer Value (ETV) – an offer made as part of an exercise where a member or members of a UK registered defined benefit pension scheme are offered an enhancement to the transfer value(s) that would otherwise have been available to them (or another inducement to transfer) on condition that those benefits are transferred out to another form of pension provision, typically a defined contribution scheme.

Pension Increase Exchange (PIE) – an offer made as part of an exercise where a member or members of a UK registered defined benefit pension scheme are offered an enhancement to their pension income (or another inducement) in return for surrendering all or part of their future pension increases (usually in respect of benefits accrued from employment before 1997).

Total Pension Increase Exchange (TPIE) – also known as Flexible Retirement Option and Retirement Flexibility. An offer made as part of an exercise where a member or members of a UK registered defined benefit pension scheme (typically over age 55) are offered a transfer value to an immediately vesting annuity, income drawdown arrangement or other similar product.

For the avoidance of doubt, the following activities are outside the scope of the question:

  • An individual member transfer request which is in line with normal ongoing terms for the scheme – both in financial terms and associated communication / any financial advice.
  • Transfers or modifications made without member consent accompanied by the required certificate from the scheme actuary.
  • Transfers with member consent from one defined benefit scheme to another defined benefit scheme where identical benefits are being provided.
  • Changes to defined benefit schemes solely relating to future accrual for active members (i.e. not affecting accrued rights and entitlements).
  • Member options ordinarily available on certain events, such as retirement or leaver processes, including early retirement and options to commute pension for a tax-free lump sum.
  • Securing benefits with an insurance company or any transfer value offered after a wind up has been triggered which is an equivalent value alternative to a buyout.
  • Any situation involving only defined contribution pension rights.
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