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NPI tells clients to contract back in or find new provider

NPI has told its 218,000 contracted-out personal pension policyholders that they must either contract back into the state second pension or find an alternative provider.

Customers who want to stay contracted out are being urged to contact an adviser and have until the end of the tax year to find another pension provider. All other clients will be automatically contracted back in.

Several providers have urged clients to contract back in but NPI is the first to ditch clients who choose not to, prompting IFAs to question whether parent Pearl Group is unwilling to adapt its systems to deal with scheme rules for contracted-out benefits after A-Day. Pearl Group outsourced its processing and admin to TCS last October in a deal worth 486m.

NPI says changes in mortality, falling annuity interest rates and conjecture over the direction of future rebates promp-ted the decision. A spokesman says: “Following actuarial guidance, we have started the pro-cess of rolling out information to customers informing them of this change.”

Need An Adviser.com director Ashley Clark says: “This is very sad as NPI was a very good operation. I imagine the group has taken a stance. It is chea-per to get rid of all rebate-only clients because it will cost too much to adapt legacy systems to deliver the tax-free cash after pension simplification.”

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