9 Month Pension Transfer - Inaction and Loss of Investment Growth?

Albermarle

Silvertabby said:

£12K could well be from <2 years service, but may not be if OP's daughter was part time.

Yes, the time scale seems longer than we would like to see, but there may be many reasons for that - first one that springs to mind being that the gaining SIPP is cautious about accepting transfers from a public sector DB scheme ("the computer says no") even when the CETV is less than £30K and the service didn't meet the vesting period.  Another reason could be that the LGPS were waiting for, say,  revised transfer factors or regulations, meaning that all non essential transfers are put on hold.

At this stage, can only suggest that OP contacts her LGPS administators to ask exactly why the transfer took so long.

For info my SIPP will not accept any DB transfers without a Yes from an authorised ( and expensive ) IFA, even if they are less than £30K .

Marcon

Albermarle said:

Silvertabby said:

£12K could well be from <2 years service, but may not be if OP's daughter was part time.

Yes, the time scale seems longer than we would like to see, but there may be many reasons for that - first one that springs to mind being that the gaining SIPP is cautious about accepting transfers from a public sector DB scheme ("the computer says no") even when the CETV is less than £30K and the service didn't meet the vesting period.  Another reason could be that the LGPS were waiting for, say,  revised transfer factors or regulations, meaning that all non essential transfers are put on hold.

At this stage, can only suggest that OP contacts her LGPS administators to ask exactly why the transfer took so long.

For info my SIPP will not accept any DB transfers without a Yes from an authorised ( and expensive ) IFA, even if they are less than £30K .

That's a fairly common stance - a product of the FCA's strictures. Stakeholder pensions remain the only type of scheme which have to accept transfers in from any registered pension scheme.

Secret2ndAccount

Marcon said:

What 'we' think or 'we' say is irrelevant. Answers to this sort of question need to be based on facts, not emotion

I think that what we think does matter. At one time, if you changed mobile service provider you had to get a new phone nunber. Then things changed and you could port your number, but it took a long time. Then things changed, and you could move your number in a day.
Once upon a time, switching bank accounts was a manual process. Now you can move over all your payments in a few clicks.
At some point, pension companies have to stop being dinosaurs, and using "it's complicated" as an excuse. It seems that their internal service targets are set according to how bad they can be before the ombudsman gets involved, then trying to be only that bad 90% of the time. The concept of being better next year than they were this year doesn't seem to arise.
Remember pensions dashboards? That crazy idea of being able to see what pensions you have and how much they are worth. They really delivered on that didn't they.
It can be done if the companies resolve to do it rather than trying to dig in and fight change. How do I know? Because airlines did it. And stockbrokers did it; and energy companies did it. And those who can't do it shouldn't claim to be viable businesses. 

I appreciate you bringing us the regulations BTW. So the transfer should have been completed in maximum 3 mths, but the onbudsman won't take any action before 6 mths, so they completed in 5 mths. Great service.

Marcon

Secret2ndAccount said:

Marcon said:

What 'we' think or 'we' say is irrelevant. Answers to this sort of question need to be based on facts, not emotion

I think that what we think does matter. At one time, if you changed mobile service provider you had to get a new phone nunber. Then things changed and you could port your number, but it took a long time. Then things changed, and you could move your number in a day.
Once upon a time, switching bank accounts was a manual process. Now you can move over all your payments in a few clicks.
At some point, pension companies have to stop being dinosaurs, and using "it's complicated" as an excuse. It seems that their internal service targets are set according to how bad they can be before the ombudsman gets involved, then trying to be only that bad 90% of the time. The concept of being better next year than they were this year doesn't seem to arise.
Remember pensions dashboards? That crazy idea of being able to see what pensions you have and how much they are worth. They really delivered on that didn't they.
It can be done if the companies resolve to do it rather than trying to dig in and fight change. How do I know? Because airlines did it. And stockbrokers did it; and energy companies did it. And those who can't do it shouldn't claim to be viable businesses. 

I appreciate you bringing us the regulations BTW. So the transfer should have been completed in maximum 3 mths, but the onbudsman won't take any action before 6 mths, so they completed in 5 mths. Great service.

In 2024, £17.5m was lost to pension scams. That seems to me a pretty good reason for putting security above speed when it comes to transfers. 

This is a public forum and people are entitled to post any views or opinions they have. My concern is that where they do so out of sympathy, on a ‘google and guess’ approach, or just a straw poll theory, such posts do nothing to manage expectations in the light of prevailing reality. 

Pension providers are bound by hugely burdensome legislation which in general they did not devise or seek, and in many cases would dearly love to be without. It’s easy – and very understandable – for those who have never worked in the industry to throw rocks at them without realising the extent to which the legislation is there to protect consumers, not give providers ‘excuses’.

The complaints on this board about ‘nanny state’ and similar are invariably made by those who have not lost their life savings to a scammer. I’ve had to deal with the fallout from such cases on more than one occasion, which does rather colour my views. The distraught individuals concerned couldn’t understand why more wasn’t done by the government/the pension provider/their adviser etc to have protected them from falling victim to such a disaster. 

Secret2ndAccount said:

It can be done if the companies resolve to do it rather than trying to dig in and fight change. How do I know? Because airlines did it. And stockbrokers did it; and energy companies did it. And those who can't do it shouldn't claim to be viable businesses. 

I'm all for improving service standards, and I have real - and often very considerable - sympathy for some of the people posting on this board who have been subjected to ridiculously poor treatment. But pension providers can’t just ‘resolve’ to speed things up without running very serious risks; the timeframes set out in legislation recognise that complexity isn’t just an excuse, it’s a reason. 

Marcon

A really good outline of the 'complexity' issues has just been posted by the ever-reliable @hugheskevi.  https://forums.moneysavingexpert.com/discussion/6644812/apologies-for-any-inconvenience#latest, quoted here because it is so well worth reading:

Whilst there is always going to be focus on the pension administrator, with most errors there are usually two different entities partially responsible, sometimes 3, or even 4:

(1) The employer - in recent years, public sector employers have routinely implemented pay awards late with retrospection. This shouldn't cause issues, but when dealing with around half a million employees, if something can go wrong it will go wrong and even if affects less than 1% of members, that is still thousands. It would be much better in pension terms to do everything on time and not need any backdating. Any manual intervention can then introduce errors of its own. There are also lots of little special arrangements, with employers funding this and that for certain members, or various different pensionable allowances - again, should be fine, but the more complicated and bespoke you make things, the more opportunity for error arises. Anything you do today will have consequences for about the next 80 years. Administrative simplicity is never a consideration in decision-making. This is one of the huge downsides of computerisation - back in the days of paper, systems had to be simple, but now any can, in theory, be programmed and delivered even if in practice it will lead to a much higher probability of error. In the case of the Civil Service, they had the same pension for decades, then introduced new schemes in 2002, 2007 and 2015. That quadruples the admin needed, as all the legacy schemes are still there for decades to come.

(2) Payrolls - most of these are outsourced, and deserve far more criticism as the root of most issues lies with the payroll data. Everything is automated now, and if the right data goes in and is complete, there should not be any error as everything just flows through an automatic system. But there is very little attention to detail in some cases, and rubbish in = rubbish out. What might start as a minor error/omission can compound into big errors.

(3) Administrator - they are the end of line, having to deal with pay and policy decisions by the employer that affect pension entitlement, and any problems with the data received from payrolls. But even if they carefully scrutinise the data received and return errors and warnings to the payroll about possibly incorrect data, they are in the hands of the payroll as to how diligently and promptly the payroll explores and resolves the errors and warnings.

(4) Members - whilst it is easy to say that the member should be able to expect their pension to be correct, the harsh truth of the matter is that the only one of the 4 entities on this list who cares about the pension is the member. All the others are just following processes, and whatever the issue they have seen it a hundred times.  Individual members should be scrutinising payslips, P60s, ABS, and any portal information to check that everything appears correct. Errors are easy to correct when promptly identified, but far more difficult years or even decades later. This is particularly the case where individuals take time out (cease and return to employment, or unpaid leave), change employer, or make any changes that affect pension, eg, go part-time. But the vast majority of members don't even know what section of the scheme they are in.

None of the above is to excuse shoddy pension administration, but issues are often much more complicated and deep rooted than acknowledged.

and I've just spotted a further exchange on that post:

molerat said:

You missed (5) Unions - who usually want to argue every pay deal so delaying the implementation with the knock on effects.  My public sector pay rise was always straightforwardly implemented each April as there was no negotiation, what the review body decided was implemented.

It is a fair point, and unions are usually involved in arguing for special pension arrangements for specific parts of the workforce too (eg Prison Governors in 2015 being given 50/50 employer/member funded Enhanced Effective Pension Ages as part of pension change negotiations). 

Secret2ndAccount

But this is whataboutery. That chap was getting paid his money. They had no problem going back 11 years and reclaculating their number when new information arose. Nobody is suggesting that we should withold payment from pensioners for 11 years, to make sure the calculation is just right. You work to get people paid.

I am dealing with an IHT case currently. The final few pennies are yet to be sorted after 3 years, with no end in sight. HMRC still demand their initial 200k promptly, and aren't required to wait patiently while I sort out my final numbers.
Are you saying that if there's a pay negotiation going on - could take a year, then 3 mths to backdate the pay - that they should just put this transfer on the bottom of the pile and do nothing until 2027?
I am asking what was going on while 'nothing' happened. Out of the 5 months when 'nothing' happened, how many days was nothing exactly what was being done? Was the OP's son deprioritised (do nothing because there's nothing he can do about it)?  If interest was due at 34.9% from the moment the request was received, would it have been paid any sooner? If the answer is yes, then clearly the LGPS is capable of working faster. Or devising a change which gets people paid, so they can get back to investing.

"It's complicated. We take a long time. If we get it wrong it will be your problem. It won't change".  Sorry, don't ask me to be happy with that

Silvertabby

In the case of the LGPS (at least the one I worked for) the priorities are the 2 Ds.  Death and divorce  (mainly because the set turn rounds are more rigid).

If the delay is due to waiting for revised factors/regulations, then the 2 X Ds are run using the existing factors/rules and then manually re-calculated once the revised data has been received.  But manual re-calculations are lengthy and therefore expensive, and so not an option for non-priority transfers out.

But we still don't know the reason for the delay in this case.  Note: If it was simply pressure of work, then the 2 X D priority would still apply, rather than order of work received.  

DRS1

Secret2ndAccount said:

But this is whataboutery. That chap was getting paid his money. They had no problem going back 11 years and reclaculating their number when new information arose. Nobody is suggesting that we should withold payment from pensioners for 11 years, to make sure the calculation is just right. You work to get people paid.

I am dealing with an IHT case currently. The final few pennies are yet to be sorted after 3 years, with no end in sight. HMRC still demand their initial 200k promptly, and aren't required to wait patiently while I sort out my final numbers.
Are you saying that if there's a pay negotiation going on - could take a year, then 3 mths to backdate the pay - that they should just put this transfer on the bottom of the pile and do nothing until 2027?
I am asking what was going on while 'nothing' happened. Out of the 5 months when 'nothing' happened, how many days was nothing exactly what was being done? Was the OP's son deprioritised (do nothing because there's nothing he can do about it)?  If interest was due at 34.9% from the moment the request was received, would it have been paid any sooner? If the answer is yes, then clearly the LGPS is capable of working faster. Or devising a change which gets people paid, so they can get back to investing.

"It's complicated. We take a long time. If we get it wrong it will be your problem. It won't change".  Sorry, don't ask me to be happy with that

We are all human and we all make mistakes.  For example the OP was posting about his daughter.

As to doing nothing, administrators and others have multiple jobs to do at any one time.  They aren't just sitting there twiddling their thumbs while watching the calendar tick over to 3 months elapsed and then going yes let's start work on this one now.

Though I am put in mind of the advert for something called Boundless where someone who appears to be a public sector worker puts a gone to lunch sign up in front of a customer and goes off to "have some fun". I am surprised the unions haven't complained about that one.

Secret2ndAccount

I will correct my error in 5 months. Or maybe 11 years. Depends on my other priorities. Sorry for any inconvenience caused.

None of us knows why this transfer took 9 months. We don't have the inside info. So we don't know if it was due to inaction, disinterest, error, or that's just how long it takes.
What I do know is that I'm not happy that that's how long it takes, and that nobody thinks this should change or expects that it will. But I seem to be the only one.