Pension Transfer times - don’t shoot the good guys

Not all pension transfers are the same and we should be careful where we aim our bullets, says Origo CEO Anthony Rafferty.

When it comes to pension transfer times there can be tendency to focus only on the bad news and tar the whole of the industry with the same brush. This made me think about how as an industry we present ourselves and where we aim our bullets.

As an area dear to our hearts here at Origo, we are disappointed when the narrative on transfer times is presented as negative for the market as a whole. This is simply incorrect. The data shows that it is more often the performance of the outliers in the market that raise overall transfer times and can cause frustrations in the market. Whereas the majority of providers are doing sterling transfer work day-on-day for consumers.

Origo is well positioned to provide a clear market barometer on transfer times, as the vast majority of the market, over 150 brands, use the Origo Transfer Service for their defined contribution pension transfers.

We also publish the Origo Transfer Index, a quarterly report on the data of 28 providers (accounting for around 80% of transfers through the Transfer Service) who have voluntarily agreed that we can publish it – good or bad – to the open market. The commitment and intention of everyone involved is that through transparency we can help drive improvement in transfer times across the board.

Digging down further into the data shows what is being achieved by the many ‘good guys’ in the market.

If we take 12 months of data to the end of June 2023 and look at the top 10 providers by transfer volume, we can see that half of the transfers they undertake are transferred out in 3 to 8 calendar days. It is worth emphasising here that it is calendar days rather than working days.

The average across the 10 providers, who collectively account for 70% of transfers through the Service, is 11 calendar days.

The latest data for the Origo Transfer Index, to the end of June 2023, shows the average time for a pension transfer is currently 13.6 calendar days. This is effectively 10 working days.

Frustrations exist with some providers in the occupation pension market, who are still taking up to several months to transfer customers’ money. We share them. This is largely because the process is undertaken manually, paper-based, and consequently, slowly. Given the chance, we can help them, substantially.

We believe every provider should be providing the best in service whether they are onboarding money or transferring it away, helping to better deliver what we know consumers want – their transfer done quickly and safely. Consumer Duty will further spotlight this from 31 July.

Of course, not every transfer is straight forward and there is no doubt also that the new regulations designed to help protect consumers against pensions scams have contributed to the recent uptick in transfer times.

Can overall average speed of transfer be improved further from here? Yes, we’re sure they can – full integration of the process with organisations’ back-office systems, for example, can significantly improve transfer times.

My point here is that we should not be shooting at the good guys who are putting their heads above the parapet trying to get things done. Rather we should be applauding them. They are the ones taking positive action to try to make a difference in the market.