On the go: The Pensions Administration and Standards Association announced on Tuesday more details about its forthcoming defined contribution transfers working group, which has the goal to speed up and lower the risk of transfers between trust and contract-based DC schemes.
Though DC transfers are a growing part of PASA’s remit, it noted that “the time taken to process these transfers, and the processes followed, vary hugely, with a resulting detrimental impact on the service offered to consumers and the trust placed in the occupational DC scheme community”.
The process can in some cases be “lengthy and opaque”, taking months to complete, while “there is a perception schemes try to hold on to funds for as long as possible, which can directly impact member benefits”, according to an explainer on PASA’s website.
John O’Hara, chair of PASA’s DC working group and manager at Origo, explained that the goal of the new group will be to remove some of the barriers to faster transfers while also reducing risk, achieving a long-term balance between speed and risk while establishing clear definitions of standard and non-standard transfers.
It also aims to set out standards for administrators to follow when processing DC transfers, providing “a challenge to the trust-based DC community to improve its transfer processing and complement other initiatives aimed at this common goal”.
Additionally, it will publish guidance aimed at eliminating transfer delays.
“The group will use its skills, expertise and research to draft guidance and present its recommendations to the PASA board for consideration and approval for publication,” O’Hara said.
“This will help facilitate fast and risk-appropriate processing of DC transfers across the whole spectrum of UK trust-based schemes, irrespective of size, contribution status and administration model.”
The first round of guidance from the new working group is expected in early 2022.
