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The Tax Incentivised Savings Association (Tisa) is to spearhead a cross industry research project aimed at finding a solution to small pot pension transfers, as divisions emerged between leading pension trade bodies over how the issue should be resolved.
The project has been launched following a conference yesterday involving representatives from across the pensions industry such as the National Association of Pension Funds (NAPF), the Association of British Insurers (ABI) and Pensions Administration Standards Association (Pasa).
It was also attended by pensions minister Steve Webb and members of the Department for Work and Pensions.
The meeting revealed a split across the industry between insurers and occupational schemes.
The government consultation on reforming small pot transfers has proposed three options: speeding up voluntary transfers, transferring all small pots to an aggregator scheme or automatic transfers from scheme to scheme.
While the NAPF and Pasa voiced their support for the aggregator option, the ABI pushed for the automatic transfer option. Existing pension transfer technology providers Altus and Origo pushed for improvements to the current system only or introducing new industry standards.
Malcolm Small, (pictured) Tisa director of policy, said: ‘There is a polarisation between the ABI and the NAPF but I think Tisa will be able to bridge that gap. We can do a lot of useful work between now and the conclusion of the government’s consultation.
‘We will research the two options, as the government could decide on an aggregator system or automatic transfer or a combination of both. But we need to be seen to be an industry in step with itself. The government are more willing to listen when we are in step.’
Tisa will now set up an executive committee formed of pension industry representatives identify objectives for a research project. Its first meeting will be in six weeks' time.
Comments (4)
So who pays for this service - and who pays for compensation when it all goes horribly wrong?
Also, surely, rather than creating another committee/system - it's something MAS could include in their remit?
11:43 on 22 February 2012
The objective of this consultation is to solve an ever growing issue. How this is done is up for debate, however the fact that this is something now being addressed across the industry can only be a good thing. If TISA can put forward proposals made by the industry, for the industry before Goverment policy can be made, then this has to be positive for the industry. With AE looming, something needs to be done to address small pots and whilst no solution will suit everyone, if it accomodates the majority, then with a small element of member control for flexibility, this will benefit all.
12:29 on 22 February 2012
It is, obviously, essential that several different bodies debate this amongst themselves for a long time, without any consultation with the pubic or their advisers. It is important to recognise that the money in these pots belongs to the insurance companies, pension fund managers etc, and that pension scheme members must not be prevented from getting what they want.
14:41 on 22 February 2012
The article above mis-states Origo's position. Origo clearly stated that its Options transfer sytem can support either aggregator or 'pot follows member' models. The latter appears to offer greatest customer engagement, hence Origo stated it as worth exploring as an automatic option, including with some opt-out member controls and a clear need to bear in mind the importance of advice as pots grow in size. We need to keep the customer in mind on this journey, and not just seek administrative convenience.
14:51 on 22 February 2012
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