Three of the biggest master trusts have joined a pensions switching initiative that aims to increase transparency and reduce transfer times for savers looking to change providers.
The People’s Pension, Now: Pensions and Smart Pension all joined the Star initiative, which is working on delivering the Transfers and Re-registration Industry Group framework.
Trig is a collaboration of 10 industry bodies and was created in 2016. The framework aims to improve the customer experience by encouraging good practice in the defined contribution space.
The group's guidelines propose a 14-day maximum limit for cash transactions and 15 days for occupational scheme transfers.
FTAdviser reported last week (August 16) that the government backed workplace pension scheme Nest, which administers 8m pension pots, also signed up to the Star initiative.
So far, 45 companies have committed their support to the pensions switching platform, surpassing the original target of 30 signatories.
With more than 4.4m members and £7bn in assets under management, The People’s Pension takes an average of 10.3 days to process a request of a member looking to change providers, making it the third best among the companies ranked by Origo.
A spokesperson said: “Our transfer times compare well and we are committed to reducing them further as part of our customer service.
“Workplace pensions are a long term product, and we will continue to focus on getting right the things that produce good long term returns for the 98 per cent of our members in our default fund – chiefly decent investment performance and keeping costs low.”
Now: Pensions, with more than 1.7m members, joined Star to participate in a series of working groups that will seek to understand why occupational pension switching processes are more complicated than personal pension ones, and will help the provider “build processes that will speed up the timescales,” said Adrian Boulding, director of policy at the master trust.
He declined to reveal the average time switching currently takes at Now: Pensions, however.
He said: “It costs us less to process a transfer quickly than to process one slowly, so our interests are perfectly aligned with the Star initiative.”
Smart Pension, with more than 700,000 members, currently has an end-to-end pension switching time of 15 days.
Sue Whittington, director of operations at the provider, said: “Smart is wholeheartedly behind this initiative and we signed up as one of the early founding members.
“The industry needs to work harder to put the customer first and this is an important step in creating a set of clear, universal standards and a service we can all be proud of.”
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