Financial services e-commerce standards and services body Origo is to launch a bulk pension transfers service for the defined contribution market later this year.
The service will allow automated transfers of schemes between pension providers and administrators, transferring member data securely between ceding and receiving parties.
It will also support the transfer of trust-based occupational and contract-based workplace pension schemes, typically in switching or consolidation scenarios.
Currently, bulk pension transfers are often lengthy processes and non-standard can leave members open to risks. Invariably transfers are reliant on data sent on spreadsheets, with manual administration and re-keying creating inefficiencies, impacting security and adding to the time and the cost for all parties.
Paul Pettitt, managing director at Origo, explained that the natural competitive switching between providers and administrators is seeing a growing need and demand for an automated bulk transfer system.
“Firms that signed up to an auto-enrolment provider two to three years ago, when the choice of provider was more limited, are beginning now to go through the review cycle, which is likely to lead to more movement in the market,” he commented.
“To rely on manual systems to transfer this level of crucial assets and data leaves all parties exposed to slow and disjointed processing and the danger that things could go wrong.”
Mr Pettitt added that the pensions industry is heading into a world where consumers expect an almost instant service. “With big-ticket items like an individual’s retirement pot, the industry cannot be seen to be lagging behind through use of time-consuming manual processes.”
Last autumn Tisa Exchange backed Origo’s call for an industry-wide pension transfer service, with chairman David Dalton-Brown stating that all pension providers should sign up to, or be required to sign up to, minimum standards.
Tex said that around half a million pension transfers are made per year and the number is forecast to rise to 1.5m in 2015 as a result of more self invested personal pension transfers, pension consolidations and ‘pot follows member’ activity.