TPR has added a section into its guidance for trustees of DC schemes in relation to transfer requests where all or part of the member’s pension investment is held in a fund which has been “gated” i.e. closed such that the investment cannot be withdrawn/encashed until the market normalises (this mainly affects property funds).

TPR accepts that payment of a cash equivalent transfer value (CETV) could be problematic in these circumstances but notes that it does not believe the law allows TPR to grant an extension to the statutory timeframe for payment in these circumstances.

TPR states:

  • trustees should prioritise these requests like any other transfer;
  • it expects trustees to do everything possible to process the requests promptly;
  • it may fine trustees who do not take all reasonable steps to pay the CETV within six months of the application date;
  • reasonable steps could include checking whether the receiving scheme will accept monies from the gated fund once it has re-opened and, if it will, offering the member a partial transfer as an interim measure; and
  • trustees should continue to report any significant failures to pay transfer values within the statutory period, which should include reasons for the failure and the actions trustees have taken towards compliance.


This analysis could present DC trustees with real difficulties. Do they retain the investment in the gated fund but pay the balance of the CETV? Unfortunately partial transfers of DC benefits are not within the scope of the statutory transfer rights under the Pension Schemes Act 1993 (PSA 93) – a member must exercise the option in relation to the whole of the CETV. If trustees have a relevant case they should take advice on the interaction with the provisions of their scheme rules in relation to partial transfers. A key consideration is the extent to which they may need to rely on express rather than statutory discharge provisions. Under the legislation, where trustees have done what is needed to carry out what the member requires, they shall be discharged from any obligation to provide benefits to which the cash equivalent related. In the Lloyds judgment of November 2020 Mr Justice Morgan held (at paragraph 86) that a trustee “does not do what is needed to carry out what the member required if it does not pay to the recipient the cash equivalent to which the member has acquired a right but it only pays a lower figure than that cash equivalent.” So, a partial transfer of the CETV will not give the trustees a statutory discharge. Trustees will in these circumstances need to look at their scheme rules and also consider with the member whether they might defer their transfer request or give a contractual discharge for a partial transfer pending the opening of the gated fund.

On the brighter side, it seems clear that whilst trustees will need to report to TPR where they fail to pay the full CETV within six months, a fine is unlikely provided the trustees have taken appropriate action to liaise with the receiving scheme and member in order to attempt to pay a partial transfer.

Trustees will not have to increase the CETV where it is paid late under Regulation 10 of the 1996 Transfer Value Regulations provided they have a “reasonable excuse”.