In 2016, the Transfers and Re-registrations Industry Group (TRIG) was established in response to findings by the Financial Conduct Authority, who in 2015 highlighted the issue of transfers and re-registration across the asset management industry. TRIG, comprising of numerous investment and pension providers plus trade associations (such as the Pensions and Lifetime Savings Association, the Pensions Administration Standards Association and the Society of Pensions Professionals) aims to define best practice and ultimately create a more consistent and reliable asset transfer experience for consumers.
Why? Well because there have been cases of transfer waiting times of 100 days – and in a digital age, there is no reason why savers should have to wait for nearly a third of a year. A good practice framework managed by two not-for-profit firms (Criterion & TeX) under the STAR brand suggests that administrators of occupational pension schemes should be working towards a 21 day transfer time with 14 days for personal pensions.
Guy Opperman, Minister for Pensions and Financial Inclusion, approves of STAR and has been quoted as such: “I welcome this initiative and the progress made so far in speeding up transfers. For many members, moving money is straightforward but for some others, it’s far from effective and I’d urge firms to commit to the TRIG framework.”
So far, so sensible. However, it seems that not everyone in the industry is as committed to the framework as the watchdog would like. STAR has warned that if providers don’t sign up to the initiative, the Financial Conduct Authority may seek legislation on the issue – certainly, it intends to review progress on the matter later this year.
FTAdviser reported that the DWP is so concerned it has held one-to-one meetings with some companies as it is worried these long transaction times can cause detriment to a customers’ values. This is clearly not ideal in an industry that wants to promote transparency and fairness.
While there are still some people without access to email, there really is no excuse for continuing to use old fashioned processes which include the sending of letters in the post for sign off – and then requesting they are posted back for review and so on. This is just a case of companies dragging their feet.
Whilst the roll-out of the STAR framework will bring advantages to consumers, providers should also benefit. STAR report that participating firms will benefit from greater certainty when dealing with other providers, leading to fewer queries and reduced administration costs.
We broadly welcome STAR’s framework which sets out a commitment to best practice around providing consumers with a faster and more reliable transfer process. This is sorely needed following the 2015 pension reforms. There may be some companies dragging their feet now but we have no doubt that the framework will be implemented, whether by legislation or not.