Government hopes to improve pension transfer process
The Government is investigating how the transfer system can be improved as part of a project to consolidate scattered pension pots overseen by pensions minister Steve Webb.
The three core proposals to consolidate small pots are:
- improving the current system;
- overhauling the system so a member's pension follows them when they move jobs;
- automatically transferring small pots into a low-cost provider such as Nest.
Pension providers have raised concerns over the complexity of occupational pension scheme transfers and over slow response from closed life insurers.
Research from the Department for Work and Pensions, which is based on face-to- face interviews with 15 UK pension providers, points to occupational scheme transfers being more complex and less efficient than, for example, transfers between group personal pensions.
The main problems reported with transfers are slow response of trustees to transfer requests, complexity of occupational pension scheme rules and "archaic" computer systems used to store occupational scheme details.
Read the DWP's research here.
Read more about transfers here.