PensionBee accuses Star initiative of ‘dangerously deluding’ legislators

PensionBee has accused Star, the government-backed initiative aimed at shortening occupational transfer times, of “dangerously deluding” legislators and regulators over the industry’s ability to improve transfer times across the industry.

Speaking to Pensions Age, PensionBee chief executive officer, Romi Savova, said that the initiative had turned into “yet another distinct pay-to-play industry body”, with particular concerns over Star’s timescales regarding the publication of transfer times data.

Star, a Criterion and TeX project backed by the Transfers and Industry Re-registration Industry Group (TRIG), has been tasked with developing a framework specifying three weeks for an occupational pension transfer, but so far a number of firms such as PensionBee have been reluctant to sign up to the project.

She said: “I’m afraid the TRIG initiative, which has now resulted in the Star initiative, has taken the wrong turn.

“We are deeply concerned that the TRIG recommendations have resulted in the creation of yet another distinct pay-to-play industry body with little urgency to its purpose, as demonstrated by its painfully slow sign up rate.

“More importantly, we are concerned about the timescales Star appear to be working to publishing data in a few years with absolutely no guarantee that the primary culprits of slow pension transfer times will sign up.

“As it stands, the initiative is dangerously deluding legislators and regulators into thinking ‘the industry will sort it out’.”

Yesterday, pensions technology firm Origo published for the first time the average pension cash transfer performance of the providers that use its digital transfer service and Sovova has urged pension companies to “modernise their transfer process” by joining the Origo service.

In contrast, following its launch in October 2018, Star aimed to have 50 firms signed up by Q2 2019, rising to 200 in the first two years, however it has so far committed 27 firms to the project. The group said it is in talks with another 30 to 40 companies.

The project has received the support of government, the Financial Conduct Authority (FCA) and major industry bodies.

“Three years of TRIG was more than enough time for the industry to get its act together and we cannot in good conscience support multi-year delays to consumers obtaining the transfer standards they deserve in the form of a pension switch guarantee,” Savova added.

However, Star Steering Group founding chair, Tom McPhail, is sceptical of the power of one provider and added that the only way the industry is going to fix the challenge is by working collaboratively on common standards agreed by all, adding that Star is making “good progress”.

“I can’t understand the mind set of people who refuse to work on collective solutions and who then complain about others not participating: if you want to change things you have to put your money where your mouth is,” he said.

PensionBee added that it was fully supportive of the conclusions reached by TRIG, Star’s predecessor, and conceded that, as things stand, Star “seems to be the best hope we have” of changing transfer legislation, which currently specifies up to six months to complete a transfer.

“You really to question whether the legislators should have to step up to the plate, because it is really in Department for Work and Pensions hands,” she said.

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