Pension provider response times have ‘stalled’ – Portafina

The fastest pension provider service times for both defined contribution (DC) and defined benefit (DB) schemes have “stalled” over the last few years, according to Portafina.

It said that the lack of technological adaption is limiting improvements in speed.

The firm stipulated that “until schemes move with the times and start accepting digital signatures instead of wet signatures that have to be sent in the post” there would be limited improvements in response time.

Canada Life ranked as the fastest DC scheme to provide requested information, with an average turnaround time of 1 week and 1 day, closely followed by Scottish Widows who had an average turnaround of 1 week 3 days.

Meanwhile, the Railways Pension Scheme moved up the league in the DB space with an average turnaround of 1 week 6 days, having been ranked 4th fastest in 2018.

However, there was a “stark” difference between the fastest and slowest providers, with the slowest DB provider, South Tyneside Council, taking an average of 15 weeks to provide information.

The Royal Mail Pension scheme improved slightly on last year when it was ranked slowest, now ranking second slowest with an average turnaround of 13 weeks.

Portafina managing director, Jamie Smith-Thompson, stated: “Once again, local councils and the Royal Mail are propping up the bottom of the table and failing to provide a good service to their, and our clients. It seems pretty clear that they are comfortable with this situation and have no intention of changing anything unless they are made to by the regulators.

“A number of councils, including South Tyneside, require a client to contact them themselves to request a specific authority form to be sent to them, and then for the client to complete it and return it when it eventually arrives – just in order to provide the information necessary to advise the client.

“It is frankly ridiculous when you are a regulated adviser and you have the client’s clear authority to request what should be standard information on their behalf.”

However, a South Tyneside Council spokesman, on behalf of the Tyne and Wear Pension Fund, said: “While the council aims to deal with all transfer requests as promptly as possible, our priority is protecting members from pensions liberation fraud.

“We have previously raised concerns with financial advisers about them not providing sufficient member authorisation before we can deal with any requests. Financial advisers being unable to get this authorisation can sometimes lead to delays.”

They added: “Our internal systems show that the average timescale to provide data, from the receipt of the appropriate authorisation, is just over four weeks. The fund is comfortable that its approach is consistent with the guidance from The Pensions Regulator.”

Furthermore, a Royal Mail spokesperson said: “We don’t recognise these figures. Our own records show that all cases in 2018/19 and 2019/20 (year to date) have been completed within the statutory 13 week timescale. The typical response time is actually much shorter.”

In the DC space, the slowest responding DC provider was Equitable Life Assurance Society who took an average of 5 weeks and 6 days, over five times slower than the fastest provider, Canada Life, who took on average 1 week and 1 day.

The Equitable Life Assurance Society has been ranked the slowest provider in Portafina’s annual league table every year since 2017.

DHL Group Retirement Plan was ranked second slowest, with an average turnaround of 5 weeks.

Commenting on the potential barriers limiting these providers, Smith-Thompson added: “Equitable Life requires clients to call the scheme to provide additional information but won’t tell us what that additional information is so the clients can’t prepare.

“DHL require an additional authority form to be completed, which is clearly designed as a barrier.”

Pensions Age has contacted DHL Group Retirement Plan, Equitable Life Assurance Society and Royal Mail Pension for comment.