Scottish Widows has moved to address administrative failures that saw it break service standards and led to delays in collecting pension contributions.
The first report published by its independent governance committee reveals the provider was unable to complete transactions within its published service standard of five days.
The IGC report says the pension freedoms “created a significant spike in demand from customers wishing to take some or all of their money out”.
It adds: “Scottish Widows shared their recovery plan with the IGC last summer and we have continued to monitor progress.
“Scottish Widows is now, March 2016, settling 80 per cent of cases within 2 days. This is now in line with their published service standards.”
In addition, the IGC says there has been “significant improvements” in the way the firm handles employers’ auto-enrolment contributions.
The committee says it noted Scottish Widows’ problems in relation to collecting employer contributions on time during 2014 and 2015.
It says: “This followed a period of significant industry change as new rules introduced by the Government, in relation to auto-enrolment, made this progress more complex for Scottish Widows and its clients.”
However, there has since been a “marked reduction” in customer complaints.
Prior to the freedoms taking effect the provider was under fire after delays in carrying out open market transfers and long call waiting times.
The firm announced it was spending £50m as part of an upgrade of its customer services earlier this month.
The report also confirmed plans to scrap exit fees on all workplace pension policies.
IGC chair Babloo Ramamurthy says: “We believe Scottish Widows offers reasonable value for money relative to the market and is making what we believe are sensible efforts to continue to improve value for money in the future.”
He adds: “Equally important is helping customers understand how to get the best from their pension. We were encouraged by the quality and nature of the support Scottish Widows introduced last year to help customers understand the new pension freedoms, and we are pleased it has earmarked substantial funds to develop a wider digital communications platform for employees, with enhanced supporting material for their employers to help customers engage more effectively with their pensions.”