Former pensions minister Steve Webb has called on The Pensions Regulator to instill greater urgency and higher standards among defined benefit funds when responding to transfer requests from their members.
Mr Webb, policy director at Royal London, said this will reduce the delays faced by advisers having to chase pension schemes for additional information and the risk of transfer value quotes expiring.
A quote expires if it is not taken up within three months and a new quote often costs several hundred pounds with no guarantee that it will be as favourable as the original.
Mr Webb said: “Whilst DB pension schemes are under pressure because of the volume of transfer requests, it would probably save them time in the long-run if they provided comprehensive information alongside the transfer value quotation, rather than have to keep replying to follow-up queries.
"I hope that The Pensions Regulator will look closely at how to speed this process up."
The frustration of advisers who have seen transfer requests lapse due to scheme delays is backed up by Floyd Fombo, a chartered financial planner at Rathmore.
"In the 11-plus years that I have been involved with reviewing DB schemes, I have not once known a DB administrator to provide all the required information at first request. It is also rare to have this by the second, sometimes even third request," he said.
"If any of the requested information is missing, we cannot accurately complete a transfer value analysis (TVAS), and as such this will result in incorrect critical yields being generated, which would mean we would be providing advice based on flawed numbers, putting both the client and the advisory firm at risk."
He added delays in scheme members contacting advisers after having received a quote was also an issue, as was the understandable need for advisory firms to make sure that any advice provided is rigorously checked.
Tom McPhail, head of pensions research at Hargreaves Lansdown, recognised the problem, but said that creating a standardised process for schemes to follow would not be easy.
"A standardised format would substantially cut down the error rate and reduce the likelihood of having to go back and verify information," he said.
"The main reason we have not taken it any further is that is no small job to work out what that standardised format would look like.
"It would be a lot of upheaval at a time when schemes have a lot of other things to worry about. There is a win at the end of it but I am not sure it would be simple."
david.rowley@ft.com
