Trust-based pension schemes are to be forced to report their performance processing transfers as part of a raft of measures designed to make it easier for consumers to access their savings.
From this summer, The Pensions Regulator will require trust-based schemes to report transfer times, “including against possible benchmarks and new transfer targets”.
The Treasury says: “To ensure that the new process improves transparency and drives up standards for individuals, whilst being practicable for schemes to implement, TPR will work with the pensions industry over the coming months to identify the best way of delivering these objectives in order to bring a package of measures into force in summer 2016.”
In its full response to a consultation on exit fees and pension transfers, issued today, the Treasury says transfer times for FCA-regulated schemes were “relatively quick”, at an average of 16 days, compared to 39 days for those falling under the remit of TPR.
It says: “It is clear from the responses to this consultation, and from survey results in particular that, there are considerable improvements to be made, especially for trust-based schemes.
“This is an area that both the Government and TPR continue to focus on, but it is important to recognise that, in general, these improvements need to be made as part of the overall process of increasing the administrative efficiency of trust-based pension schemes.”
The Government also says it plans to strengthen supervision of trust-based schemes – and in particular master trusts – but has stopped short of introducing an a ‘whitelist’ of approved pension providers.
It says: “The Government is, however, considering the underlying issue of whether there is a need for increased supervision of trust-based providers, particularly for those multi-employer occupational pension schemes known as ‘master trusts’ which have been set up to support automatic enrolment.
“This work, to review how any strengthened quality assurance process might be achieved, would form an important foundation for any future whitelist, and the Government will continue to develop its thinking in this area over the course of the year.”
Chancellor George Osborne previously announced that the FCA would be handed a new responsibility to cap “excessive” exit fees for the contract-based sector, with pensions minister Baroness Ros Altmann later confirming that the same duty would apply to TPR.
The FCA will seek to introduce a cap on charges from March 2017, although no timeline has been specified for an equivalent TPR cap.
In addition, the Government has unveiled plans to increase Pension Wise services, requiring the guidance provider to develop a pension transfers “roadmap” to support individuals seeking to switch provider.
The new information will include free and impartial information on schemes’ statutory requirements, and their responsibilities in managing the transfer process.