Industry calls for standard rules to help the defined benefit transfer process have been heeded by the regulator.
The Pensions Regulator (TPR) held a roundtable in July, at which it heard the views of financial advisers, providers, and scheme administrators on DB transfers information requests.
The regulator is currently working with representatives from these groups to draw up a template to be filled by pension administrators when they are asked for a DB transfer value.
This document should reduce the amount of information requests from advisers, and the time spent in this process.
DB transfers have been soaring, as savers seek to take advantage of sky-high transfer values and to move their nest eggs into defined contribution schemes in order to access them via the pension freedom rules.
The template is expected to be published next year, since TPR is working with the Financial Conduct Authority (FCA) on this initiative.
According to a TPR spokesperson, this work is being developed alongside FCA’s consultation on DB transfers, which closes in September.
A policy statement is expected to be published in the first quarter of 2018.
The regulator is working on an “agreed list of necessary data items which financial advisers consider essential to be able to advise their clients and which scheme administrators consider deliverable”, the spokesperson added.
Sir Steve Webb, director of policy at Royal London, flagged up this issue with the TPR, after being contacted by Neal Adams, pension and investment specialist at financial advice firm Drewberry.
“Generally, a quote for a transfer is valid for three months. So, if the process of advising and making the decision and so on takes more than three months, the quote lapses,” Sir Steve said.
“The adviser will need to get a new quote, sometimes be charged for it, and sometimes the value [of the transfer] can have gone down,.”
Having a system whereby this part of process is taking too long “is not in anybody’s interest,” he added.
According to Sir Steve, the regulator spoke with Mr Adams, and after that it set up a meeting in Whitehall, Westminster, to discuss the topic, which he also attended.
“We are aware that where a member of an occupational DB scheme wishes to transfer their safeguarded benefits to access their benefits flexibly, doing so in a timely manner can be challenging,” the TPR spokesperson said.
“Our primary concern is that DB scheme members have all the information they need to make an informed decision about their pension,” he added.
Mr Adams said that “a situation where people are facing potentially a life changing scenario and are rushing to make a decision in the final weeks before the transfer value expires” should be avoided.
He said: “I approached [Sir] Steve because I was finding quite frustrating trying to get information from the scheme administrators to allow us to give the right advice to clients.”