Slow Transfer of money between providers

LosEndos

Back In January my Company transferred all of the pensions from the Pru to Scottish Widows. The process seemed to go quickly and quite well.

However on closer inspection the Pru funds were liquidated on the 24th Jan, but the money was not invested by Scot Widows until the 14th Feb. No big issue - except the funds I was invested in (same selection at pru & SW) went up by 3%. Unfortunate.

I have spoken to SW and they claim to have received the funds on the 13th and invested them on the 14.

So I asked the Pru what the delay was between liquidating and sending the funds to SW. So far 'they are looking into it', 'will get back to me shortly', 'will call you this afternoon' etc.

Now I understand that a few days to transfer money between providers would be acceptable, but not 21 day.

Anyone had experience of the 'usual' time between liquidation and receipt by the new provider?

dunstonh

Now I understand that a few days to transfer money between providers would be acceptable, but not 21 day.

The longest I have known was 18 months. 1-3 weeks is more like the norm. Those companies both use the Options system so you would expect to be out of the market for around one week.

LosEndos

Thanks for the comment.

Problem is many people transferred. It would seem that everyone was cashed in on the same day (24 Jan) at Pru, but there is a wide spread at when the funds were transferred to Scottish Widows. There should be no reason for this. It should all have gone at the same (more-or-less) time.

Oh, what is the Options system you mention?

dunstonh

Oh, what is the Options system you mention?

It is the electronic pension transfer system used by some providers on some types of pensions. Not all providers use it and some types of pension cannot use it. Those revert to paper method and rely on post and very frequently cheques.

Daniel_Elkington

It's called Origo Options and is an on-line system for doing money transfers relating to pensions.

Due to the law it's not quite as simple as pru writing scot wid a cheque.

It shouldn't be 21 days though. Most pension transfers can take that long correct, however in terms of disinvestment etc:

Day 1 - units are sold at the end of day
Day 2 - Money from unit sale is assigned to administrator to forward to new provider
Day 3 - Money is transferred via origo options (arriving overnight)
Day 4 - Money is confirmed from new provider and assigned to buy units
Day 5 - Money is used to buy units, either overnight or at the valuation point of the units.

This is a very simplified summary of the cash transfer process.

It could be a lot slower if you factor in Royal Mail. If the old pension scheme is a group scheme and it is very old then that particular system may not allow for origo options. It may also have been processed as a bulk transfer which would slow it down even more.

Long story short; this is just a problem with pension transfers and there is very little you can do about it.