Former Pensions Minister Steve Webb (now director of policy at Royal London) has called upon the Pensions Regulator (tPR) to consider whether the transfer process can be simplified and whether schemes should be required to provide all relevant information when a Cash Equivalent Transfer Value (CETV) is first requested.
A CETV when issued is guaranteed for three months. In this time, the member must liaise with his adviser who will then request any additional information that may be required for the appropriate transfer analysis and financial advice to be provided. However, members are encountering delays during this stage of the process often resulting in the member having to request a new quotation which may also be at their own expense.
CETVs are determined by prevailing market conditions at the time the quotation is produced. Consequently, requesting a second quotation may result in a less favourable valuation for the member, whilst the adviser may also have to start the advice stage of the process again to avoid using out of date information.
Steve Webb said "It is deeply frustrating for scheme members and advisers when the process of providing advice on a transfer drags on, and particularly if a new quote has to be prepared. While 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.
"I hope that tPR will look closely at how to speed this process up."