Concerns have been raised with The Pensions Regulator today over the transfer process between defined benefit (DB) and defined contribution (DC) pension schemes.
These are in relation to transfer value quotes lapsing before a member is ready to make the switch, resulting in a new quote being required, which often costs hundreds of pounds, and may not be as favourable as the original.
Royal London policy director, Steve Webb, has asked the regulator to look at whether the process could be streamlined, by requiring schemes to provide more information when the transfer value quotation is issued, in order to reduce delays.
He said: "It is deeply frustrating for scheme members and advisors when the process of providing advice on a transfer drags on, and particularly if a new quote has to be prepared.
"Whilst DB pension schemes are under pressure because of the volume of transfer requests, it would probably save them time in the long-run if they provided comprehensive information alongside the transfer value quotation, rather than have to keep replying to follow-up queries."
These concerns were originally raised by Rathmore Financial director, Floyd Fombo, who highlighted a combination of factors that often result in the three-month validity of a cash equivalent transfer value being insufficient.
These include, delays in members contacting an advisor after receiving a quote, pension schemes regularly providing inadequate information to enable a transfer value analysis, and the understandable need for advisory firms to make sure that advice has been provided and checked.
"In the 11-plus years that I have been involved with reviewing DB schemes, I have not once known a DB administrator to provide all the required information at first request, it is also rare to have this by the second, sometimes even third request," Fombo said.
"If any of the requested information is missing, we cannot accurately complete a transfer value analysis, and as such this will result in incorrect critical yields being generated, which would mean we would be providing advice based on flawed numbers, putting both the client and the advisory firm at risk".
Webb said that he hoped The Pensions Regulator would take these concerns into consideration, and look closely at how to speed up the process.
Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession