Tisa Exchange, the re-registration service, has called for set standards for electronic pension transfers ahead of the shake-up of access to pension cash next year, warning that if an agreement on turnaround times cannot be reached savers will continue to suffer from mixed outcomes, including a risk to their assets.
Tom McPhail, head of pensions research at Hargreaves Lansdown, who is also a director of Tisa Exchange, said: “We owe it to savers to ensure they can quickly and easily transfer their pension assets and that the process is as cost-effective as possible.
“At present there is limited choice in the pension transfer market, and while there are standards in place, these are not open and do not adequately protect the consumer when things go wrong.
“This is wholly unacceptable and not in the best interests of consumers or the industry. If the industry does not act quickly enough, we believe the regulator will, as it has already threatened to do so with investment transfers and re-registrations.”
Tex said that currently about half a million pension transfers are made per year and the number is forecast to rise to more than one and a half million in 2015 as a result of more self-invested personal pension transfers, pension consolidations and ‘pot follows member’ activity.
The organisation believes that the current manual system, which is form-based, is outdated and can be changed to reduce the cost of transfers.
Mr McPhail said: “A lack of uniformity around service levels means that for some savers transfers can take days, whilst for others it can take months to complete.
“This is not good enough in a world where we can now make immediate case transfers between banks and bank accounts. As a minimum, we are calling for a Service Level Agreement between providers for transfers to take no more than eight days.”
Mr McPhail’s comments follow Altus’s call for ‘open standards’ across the board for electronic pension transfers earlier this year.
Mike Morrison, head of platform technical at AJ Bell, said transfers could be governed by whether providers choose to offer the new rules or not.
He said: “It is difficult to know how many transfers there will be in April at this stage - and how difficult it might be to put the necessary procedures and systems in place.”
