Until recently, the ABI’s guidelines stated that its members should aim to process member requests for investment redemptions within 10 working days.
This guideline has now been scrapped and replaced with what Hargreaves Lansdown calls a less demanding aim of paying out the funds by the selected retirement date, as outlined within their Handling Customer Claims document.
If this date is not met, insurers decide whether a significant delay has occurred or not.
Hargreaves says that no formal announcement has been made by the ABI on this and that some of the ABI’s members were not aware of it.
Pension Analyst Nigel Callaghan says: “We are deeply disappointed by the ABI’s action on this issue. The retirement boat is sinking, and the ABI isn’t so much rearranging deckchairs, as banging away at the hull with an axe in the belief that it will let the water out.
“There is no reason why their members can’t settle transactions within five days; the Unit Trust industry can do it, so why not the insurers?”
ABI spokesman Jon French said “The ABI believes that the new guidance is, in fact, more stringent and gives customers more certainty about when their payments should start.
“There was a wide consultation on the new guidance with member companies and all relevant ABI member companies have been informed of the changes. There have been stories about the new guidance in the trade media over the last few months.
“The industry is taking concrete steps to significantly improve transfer times, and all other aspects of the customer experience of arranging an annuity.”