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Options annuity transfer initiative branded a success
The time taken for annuity transfers between providers has been cut from three weeks to an average of just eight days, thanks to the pensions industry's 'Options' initiative.
Options, developed by Origo in conjunction with UK pension and annuity providers and the Association of British Insurers (ABI), was launched three months ago and has since delivered significant improvements on annuity transfer times.
The system is designed to speed up the exchange of information and funds as part of the annuity transfer process, including those carried out under the Open Market Option (OMO).
Performance is expected to further improve over time as refinements are made and more providers start to use the system.
Currently 16 pension and annuity providers are signed up to 'Options', representing over 90 per cent of the total UK annuities market.
At the moment, 11 are using the system, including Aegon Scottish Equitable, Canada Life, Friends Provident, Just Retirement, Legal & General, and LV=.
According to the Association of British Insurers (ABI), Scottish Widows and Zurich are expected to go live shortly and more providers are likely to join as the service develops throughout 2009.
The performance report for Options during the first quarter of the year showed that 6,981 transfers were processed between 1 January and 31 March 2009.
Of these transfers, 58 per cent took place in less than seven days, 34 per cent in less than 14 days and 8 per cent in more than 14 days.
Maggie Craig, director of life and savings at the ABI, said: "This is very good news for annuity customers, and a real success for the pensions industry.
"Pension and annuity providers, and the ABI, were determined to improve performance on transfer payment times. The 'Options' initiative has got off to a great start in achieving this goal.
"Options directly benefits the vast majority of customers who want to move between annuity providers. It makes the whole process significantly easier for customers and advisers, meaning policies will be set up much more quickly than ever before.
"We aim to make further enhancements to the system soon, including extending its operation to other forms of pensions transfer."
