Trustees of schemes within the Financial Assistance Scheme (FAS) assessment period face a dilemma with regard to the discharge of any defined contribution (DC) benefits.

The requirement to discharge DC benefits does not in any way reduce the trustees’ governance responsibilities towards the DC benefits either in the way they are managed within, or ultimately transitioned from, the scheme. However, concluding the exercise earlier rather than later can help mitigate scheme expenses.  

Many trustees feel uncomfortable with the use of S32 policies to discharge DC benefits as they can detrimentally affect the shape and value of members’ benefits.  For example, death benefits payable to members’ beneficiaries can be reduced by up to 40%.   

But perhaps the biggest issue that trustees have to address is whether, having spent many years supporting members in their funding, investment and retirement decisions, they are comfortable moving members’ benefits into insurance policies where no such support is afforded.  

A new solution, known as XPT FAS Solutions, offers an effective means of discharging the DC benefits, whilst protecting the shape and value of members’ benefits and providing them with valuable ongoing support.   

To download the XPT FAS Solutions factsheet, click here