Defined Contribution  

Opperman tells providers to speed up pension transfers

Opperman tells providers to speed up pension transfers

Pensions secretary Guy Opperman has told providers to speed up defined contribution to defined contribution pension transfers.

Speaking at an Association of British Insurers (ABI) conference in London today (26 April), Mr Opperman said more needed to be done to speed up defined contribution (DC) pension switches.

Mr Opperman said: "Practice here is often good but not uniformly so. Many schemes including most ABI members are signed up to standards which allow for routine DC to DC transfers in 10 to 12 days.

"I personally favour an end to end timescale of no more than a few weeks and I am hopeful that the transfers and re-registration industry group will deliver that and I encourage all pension schemes to get on board with the work they are doing on standardising and simplifying approaches to allow faster routine DC to DC transfers."

Mr Opperman also revealed the single financial guidance body looks set to be in place by the winter noting the bill supporting the implementation of the body should be signed off in the House of Lords next Tuesday having had its final reading in the Commons early this week. 

It should receive Royal Assent in mid-May and be up and running in the later parts of this year, as previously planned for, despite having suffered delays.

Recruitment for the chair and the chief executive of the service, which will replace The Pension Advisory Service (Tpas), Pension Wise and the Money Advice Service (Mas), is already underway.

Mr Opperman said: "It is definitely my intention for the single financial guidance body to be up and running by the end of this year, my hope is September or October."

He praised the success of pension freedoms so far but said the industry needed to do more to promote the positive aspects of freedom and choice.

He said: "Pension freedoms is one of the great success stories of the coalition.

"There are those out there who are critics of pensions freedoms on a multitude of levels and for a multitude of reasons. 

"You need to make the case that allowing people to access their pensions and [spend it in a way that suits them] is a good thing.

"You need to keep making the case in support of pension freedoms."

Mr Opperman said FCA data showed of all defined contribution pots eligible for access just more than 1.2 million had been accessed by March 2017.

This leaves 5.8 million eligible pots untouched, he said.

He said: "The message is people are taking their time to consider their options."

He also said FCA data showed 94 per cent of people fully withdrawing their pensions had other sources of income and there was no evidence people were squandering their savings.

But Mr Opperman called for new products to help people meet their retirement needs.

Mr Opperman also said he wholeheartedly backed the idea of introducing a midlife MOT, as called for by the ABI in a report out this morning.