20 April 2012
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.
