Pension transfers ‘roadmap’ to be created

A pension transfers ‘roadmap’ is to be produced to help people navigate through the process. The Government has announced the move as part of plans to shake up the way transfers are currently handled as it also pledged to cap early exit charges before the end of March 2017.The Pensions Regulator, meanwhile, is to introduce new guidance for scheme trustees to help ensure transfers are processed “promptly and accurately”.The Treasury published a report about exit fees and transfers yesterday, following a consultation.This stated: “The government will make trust-based pension schemes more transparent and accountable for their performance in processing transfers through a new reporting regime.“Pension Wise will develop additional guidance on pension transfers in order to support individuals through the transfer process.“Currently, Pension Wise does not inform individuals about the steps they need to take to transfer their pension.“In response to the issues raised in this consultation Pension Wise will develop guidance on pension transfers (a pensions transfers ‘roadmap’) in order to support individuals through the transfer process.“This will include providing free and impartial information on schemes’ statutory requirements, and their responsibilities in terms of managing a safe and efficient transfer process for Pension Wise users.”Gillian Guy, chief executive of Citizens Advice, which runs the face to face Pension Wise service, said: “Pension transfer delays and exit charges risk putting consumers off making the right pension decision for them.“The expansion of Pension Wise to address pension transfer times will help consumers get a better understanding of the time it takes to move their pension, and it’s good to see the Government is taking action to protect people from excessive fees and delays.“The requirement to take financial advice for people who have a certain size or type of pensions offers an important safeguard to protect consumers. But as it stands many people report that they don’t get enough warning or explanation about why they are required to take financial advice.“This can have a knock on effect on the time and money it takes for them to access their pensions.“Providers need to take this opportunity to ensure consumers get a clear and consistent message about when and why they are required to take financial advice about accessing their pensions.”Nathan Long, head of pension research at Hargreaves Lansdown, said transfer times, have been “a thorn in the side of the retirees for years”.He said his firm’s research showed the most important trend was that “all the laggards have not bothered to invest in electronic transfers”.The other, he said, was that the insurance companies were mostly “doing a good job, whilst the occupational scheme providers are not”.He said: “This demonstrates that whilst there are many benefits to using a trustee structure for pension provision, contract based pensions of the type operated can in some cases produce significantly better results for members.”On the cap for early exit charges, he said this will “unshackle thousands, allowing them to enjoy the pension freedoms in all their glory”.

Pension transfers ‘roadmap’ to be created

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