Pension transfers - how long do they take?

Darryl

Can anyone tell me how long it takes to transfer a pension from one provider to another?

Assuming that I already have the transfer value, how long from when I request the transfer will the funds arrive in my specified pension account?

Is there a standard time? Or do all providers take different amounts of time?

I think it may be the latter, as Norwich Union have just told me it will take them 8 days to send me a written transfer valuation. Whereas, Standard Life can tell me this figure over the telephone. So I'm dreading how long it will actually take to transfer funds (if I request it).

Darryl.

Pal

Providing a quote over the phone is easy - most companies can do it. However it does not contain details of the benefits payable or the policy you are transferring from, and doesn't contain the forms you need to complete in order to transfer.

I would guess that it would take 1-2 weeks for most companies by DD will have more of an idea than me.

Occupational scheme transfers can take longer because of the amount of information and number of forms that need to be completed by both pension schemes.

Out of interest, does it really matter? Pension scheme investing is long term. A week or two out of the market is hardly going to make a massive difference to your pension in 10/20/30/40 years time, unless you get really unlucky.

dunstonh

There is no standard.

If i request information, it can take anything from 2 days to 6 months (NPI worse offender at the moment) before that information arrives. Once the transfer forms have arrived and been sent with the application to the new provider, they in turn send it to the old provider with the supplementary information completed. That new provider can take anything from 24 hours to 4 weeks to send over the information. Some, at that point, will re-issue the discharge forms to the client with some flimsey made up excuse (Pearl).

Currently my longest outstanding transfer is from July last year with 3-5 weeks being the norm. Usually, it is not time out of the market that is of issue. Once the insurer receives the funds, they will invest it that or next day'd unit prices. It just might take them another couple of weeks to issue the documentation. Slowest to issue documentation at the moment are L&G.

Getting the information over the phone is not satisfactory. You may get a value but it is best to get it in writing and confirm if a market value reduction applies (where applicable). Also, you should check for guarantees and options which may be present on the old plans. Also, it waiver of premium/contribution is on the old plan as that may have more beneficial treatment than a modern equivalent.

You should also request projections to allow a like for like comparison of charges.

Darryl

Thanks Pal & DD. Thought you guys might be able to help.

"There is no standard" - just as I suspected. If there's a standard time period for transferring a current account from one bank to another, methinks there's justification for asking the FSA or someone to impose a standard time for pension transfers. I feel a letter coming on...

So, what happens to your pension cash once you've requested a transfer, and your old provider is considering it/making up excuses/twiddling their thumbs?

Is it still invested in your old pension fund (rising/falling in value), or is it held in limbo at the transfer value on the date of the transfer request?

I agree that timing isn't of great significance over 20+ years of investing. But, if pension companies are delaying any transfer so that it disadvantages my pension fund value, isn't this wrong?

DD - what do your clients say when it takes over a month to transfer from one pension to another?

Darryl.

dunstonh

methinks there's justification for asking the FSA or someone to impose a standard time for pension transfers. I feel a letter coming on...

Its not as simple as say moving a bank account. The insurers usually swap questionnaires which each other has to complete and return to each other. There are many types of pension schemes and each has it's own rules. That information needs to be passed on. Sometimes that can involve writing to 3rd parties or older schemes that may have been transferred from in the past.

Is it still invested in your old pension fund (rising/falling in value), or is it held in limbo at the transfer value on the date of the transfer request?

Depends on the insurance company. Some will issue a letter confirming a guaranteed value for a time period. Others will transfer the value of the day of transfer. The latter being the most common.

I agree that timing isn't of great significance over 20+ years of investing. But, if pension companies are delaying any transfer so that it disadvantages my pension fund value, isn't this wrong?

The point is that you are not out of the market for any great time. Often it is only a few days to allow for post. It's the paperwork being issued after the event that some are slow at. Virtually all transfers involves cheque and not bank transfer.

DD - what do your clients say when it takes over a month to transfer from one pension to another?

They never question it. Mainly as I prep them that it can take that time. Plus the reason for leaving is usually a failure on the old company in a number of areas and they expect poor service.

JCL

dunstonh wrote:

Once the transfer forms have arrived and been sent with the application to the new provider, they in turn send it to the old provider with the supplementary information completed. That new provider can take anything from 24 hours to 4 weeks to send over the information. Some, at that point, will re-issue the discharge forms to the client with some flimsey made up excuse (Pearl).

Abbey Life are another who will make up a variety of reasons for delaying the transfer payment.

A major problem is the lack of effort some IFA's are willing to put in. I know from experience that around 35% of transfer applications don't have the transfer discharge forms and Inland Revenue forms (if required) included with the new provider application.

This leads to a hell of a lot of needless admin work and delays that can be avoided. There's also the issue of policyholders themselves taking ages to complete the paperwork.

The number of parties involved make it almost impossible to say how long a transfer will take. If you have good IFA who gets all the paperwork upfront for you to complete then it should reduce the end-to-end time significantly.