Origo Options Transfers data shows majority of pensions transfers complete in two weeks or under
The latest data from not-for-profit Fintech company Origo taken from the Options Transfers service, shows that 90% of pension transfers are completed in or under 14 calendar days.
Origo completes around 95% of contract market pension transfers through the Options Transfers service, making its data one of the most reliable in the market to measure the customer experience.
Late last year, Treasury reported on a Consultation into pension transfer times, in which it recommended pension schemes implement automated transfer processes.
It set out plans also for a new regulatory requirement for occupational pension schemes to report, on an ongoing basis, how they are performing in processing transfers, including against benchmarks and new transfer targets. The FCA has since been undertaking further work in this respect, to which Origo has contributed.
Origo Options Transfers data shows that, since Pension Freedoms came into effect, the average transfer time including the time it takes for the banking system to process monies (i.e. BACS, CHAPS etc) is 11 to 12 calendar days. Since the inception of the service in late 2008, the timeframe for pensions transfers successfully completing through Options is (in calendar days):
- 10% in one day
- 30% in three days
- 50% in five days
- 75% in eight days
- 90% in 14 days.
Where transfers take over 14 days, often this is due to awaiting the actual retirement date; or for the last contribution/premium; or for trustees’ authorisation.
Commenting on the figures, Paul Pettitt, Managing Director, Origo, says: “Origo Options Transfers is enabling hundreds of thousands of transfers every year – currently completing five transfers a minute. We’ve transferred over £85bn in value since Options was launched in late 2008. In that time, 90% of transfers have completed within two weeks* and 10% within just one day.
“These figures only reflect transfers undertaken through the Options Transfers service, which is an automated transfers service. They are an absolute measure of the consumer experience.
“The reason the transfer times are so low – compared with the 39 working (not calendar) days which is the average time quoted in the Treasury paper – is because Options is the product of a collaborative community of 89 brands, who work together to coordinate approaches to particular issues. By accurately reporting and pushing down on transfer times, our data can help improve the overall consumer experience.
“Following the introduction of Pensions Freedoms in April 2015 we tracked an increase in processing times for Pension to Pension transfers of around 2 days (from 10-12 calendar days), which was mainly the result of the implementation of checks to safeguard members’ benefits. It is right that speed of transfer is balanced with consumer protection, effective procedure and appropriate risk mitigation – particularly given the increase in pension scamming attempts. However, we are pleased to note that transfer times have been coming down again as the industry has assimilated the new procedures and made processes faster.
“The speed of the transfers will be down to individual companies, employers and the systems and processes they employ. Where firms are still using manual, largely paper-based systems, transfer times and their processing costs often remain high”
(*This is for the pension transfer process to the point where the BACS payment is initiated.)