A number of leading industry names have agreed to sign up to a new joint venture, aimed at delivering a long-term governance solution to transfers.
Seven firms including: Standard Life, Aegon, Aviva, Fidelity, Old Mutual, Janus Henderson and DST Funds, have “registered interest” in Star, a project backed by not-for-profit organisations Criterion and TeX, but will not be able to sign up until it is officially registered, expected to be in January.
Speaking exclusively to Pensions Age, Criterion managing director, Caroline Mansley, said the group hopes to have 50 firms signed up by Q2 2019, rising to 200 in the first two years, as it seeks to create a “more consistent” and reliable transfer experience for consumers.
The initiative, which received backing from the Pensions Minister Guy Opperman and other industry heavyweights in October, will look to deliver a framework built by the Transfers and Industry Re-registration Industry Group (TRIG) after the Financial Conduct Authority (FCA) highlighted the issue of transfers and re-registration across the asset management industry.
The framework specifies three weeks for an occupational pension transfer, and will aim to deliver benefits to both consumers and firms looking to gain from “consistent and improving standards”.
Mansley said: “The launch of Star marks a significant milestone in the delivery of the TRIG framework to the industry and helping companies not only to improve their transfer times and deliver better performance for consumers but also to benefit from greater certainty in dealing with counterparties, leading to fewer queries and lower administration costs.”
Once the group has reached 50 sign-ups, a cross industry steering group will be developed, and an independent chair appointed, who will “govern the execution” of the framework.
“The breadth of organisations will allow us to start five work streams, grouped together depending where they play in the market place. We will then look to share that with the new community, which we don’t think has ever come together before, and that’s why it’s a landmark,” she added.
Additionally, Star will run a bronze, silver and gold accreditation process, rubber stamped by the FCA, in a move which the group hopes will “shine a spotlight” on firms that are underperforming.
“Consumers will then be able to see how companies are performing in terms of transfers, and potentially start to complain more, because the process isn’t great,” Mansley said.
According to Criterion, the measures will take roughly two years before consumers will feel the benefit, but will eventually result in speedier transfers, improved control over their money and increased competition.
Firms who sign up to the initiative will pay a £3,000 joining fee and an annual £1,700 fee for maintenance development, which firms could end up paying three times if they qualify for each stream.
TeX chair, David Moffat, added: “We are confident that with governance, process and targets in place, and the measurement and publication of participant performance, we will see a strong commitment from across the industry to adopt the framework.”
Associations that have formed TRIG included the Association of British Insurers, Association of Member-Directed Pension Schemes, Pensions Administration Standards Association, Pensions and Lifetime Association and the Society of Pension Professionals.