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‘A-Day changes are set to cost 15m per life company’

Pension providers are not prepared for A-Day and face a bill of up to 200m to cope with the consumer choice it will bring, claims Computer Sciences Corporation.

The IT company, which manages over half of the UK’s life and pension policies, says insurers may have dealt with compliance issues ahead of A-Day next April but they cannot yet cope with the flexibility and choice that the new regime will allow.

CSC says the industry will need to find 200m, with leading providers each facing 15m of new costs, to meet the consumer’s ability to incorporate a wider range of assets and funds into pension packages.

Head of life and pensions Patrick Molineux says new regulations mean distributors and investors will be active in requesting funds from other investment houses as well as other assets, creating a profound industry shift which providers are underestimating.

Molineux says greater inv- estment is needed to meet consumer demand for information and the transactional ability to manage assets within their pension investmentsHe says: “Providers will need to work with their agents and IFAs to ensure they give the right advice to investors.

“B2B relationships will bec-ome more important as all insurers, distributors and investment houses need to communicate with each other auto-matically, flexibly and rapidly in order to be able to respond to customers’ demand for act- ive management of their pen- sion assets.”

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