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DWP summons providers over pension switching times

DWP summons providers over pension switching times

The Department for Work and Pensions has threatened to introduce legislation to force pension providers to decrease pension switching times.

The government has summoned companies who are considered ‘laggards’ on this issue for individual meetings with the DWP.

A DWP spokesman told FTAdviser: “The pensions minister wrote to firms urging action on slow transfer times.

“We’re stepping up our calls for progress and bringing those providers in for urgent talks so they can better explain what is going on. 

“We’re clear that we aren’t ruling out future legislation to force a reduction in transfer times.”

The spokesman declined to say which companies had been summoned for the meetings, which were first reported by Pensions Age, and how many meetings had taken place.

Pensions minister Guy Opperman wrote to five third party providers at the end of last year, who also haven’t been named, asking them for explanations on why some “some firms take more than 100 days to complete pension transfers, totally out of step with the rest of the financial services industry”.

The industry is taking a series of initiatives to decrease pension switching times, such as Star.

Launched in October 2018, this is a partnership between Criterion and TeX is working on delivering the Transfers and Re-registration Industry Group framework, which was published in July and proposes a 14-day maximum limit for cash transactions and 15 days for occupational scheme transfers.

FTAdviser reported last week that fintech company Origo has started publishing quarterly pension switching times reports.

The first analysis showed that from the 27 companies which agreed to reveal their data, Hargreaves Lansdown is the provider which takes the longest to process a pension switching request, at 29 working days of average.