Ten weeks should be the maximum time limit for defined benefit transfers, according to industry-wide guidelines published on Monday by the Pensions Administration Standards Association.
Needlessly long transfers have opened the door to scammers, PASA warned, so administrators must take faster transfer times seriously.
Transfer values remained close to record highs in May, consultancy XPS Pensions found. In this context, PASA’s DB transfer guide aims to help schemes boost bureaucratic efficiency, promote transparency and enhance member satisfaction.
“It looks to form the glue that brings together a collaboration of a wider industry objective, which is to better serve and protect members,” said James Ellison, chair of PASA’s DB transfers working group.
Mr Ellison said that scammers were weaponising lengthy transfers to break trust between a member and their scheme, often pushing them towards unwise transfer options.
“A lot of scammers are using the delays in schemes to effectively break trust between members and a scheme, saying ‘they are trying to hold on to your money, they’re not letting you transfer out’, and using that as leverage,” he told Pensions Expert.
Tactics to drive down scam activity include improving speed, communications, and embedding a vetted independent financial advisor for members, Mr Ellison said.
Pensions minister Guy Opperman welcomed the guidelines, but warned that administrators must accelerate further. He told the launch: “Ten weeks is great, but be under no illusions: government, of some shape and format, will want you to go faster in the future.”
Mr Opperman said he wanted the pensions industry to be more like other UK industries – such as banking, electricity or telecommunications – in embracing simplicity and flexibility for the consumer.
He continued: “The idea that this is just too complicated for us to do any quicker... is not acceptable on a long-term basis. So I welcome where you are, but trust me you will be required to go faster at some stage.”
The Pensions Regulator participated in the working group. PASA chair Margaret Snowdon, TPR head of regulatory policy David Fairs, and Mr Opperman all praised the collaboration between regulators and industry.
Mr Opperman added: “I’m particularly impressed that these solutions have come about through greater collaboration between the regulators and their respective partners in industry. Put simply, I don’t want to legislate, so please work together.”
