18 May 2009
According to provisional figures from the Pensions Advisory
Service (TPAS), complaints about poor service by pension providers
have risen 10 per cent over the past year in spite of industry
efforts to tackle the long -running issue of annuity transfer
The number of complaints TPAS handled about personal and
occupational pension policies climbed to nearly 8,000 in the year
to the end of March.
Delays by insurance companies in processing paperwork or paying
benefits caused the most concern for policyholders, with these
Chief Executive, Malcolm McLean said: "The year has hardly been
encouraging. While volatile economic conditions are no doubt
partially responsible for the increase, we suspect once more poor
customer service remains the underlying problem."
Complaints about delays were either in getting quotations, in
completing the open market options or in paying benefits, both on
retirement and death. About a third of the TPAS complaints for the
period concerned policies from life offices with closed books.
"Closed schemes devote a minimum of resources to these books so
their level of customer service is often very low", says Mr.
TPAS is to publish full details about its complaints in its
annual review in July.
But the overall picture of declining service standards came as
the industry highlighted improvements to annuity transfer times.
The Association of British Insurers (ABI) said a new system, dubbed
the "Options initiative", had cut the average time to transfer an
annuity from one pension provider to another to just eight calendar
days from about a month previously.
A total of 16 providers are signed up to the new system -
representing 90 per cent of the annuities market - although 14
providers are currently using the system. These are Aegon Scottish
Equitable, Canada Life, Friends Provident, Just Retirement, Legal
& General, LV=, MGM Advantage, Norwich Union, Partnership,
Prudential, Standard Life, Axa, Pearl Group (including Resolution)
Scottish Widows and Zurich were expected to go live "shortly".
Windsor Life said it was still evaluating the system and
considering whether to join.