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Pension transfers information – a clear candidate for efficiency gains

21 December 2020

The process of obtaining client’s information from pension schemes is clearly in need of efficiency gains to be made through greater standardisation. ATEB’s Steve Bailey looks at the Regulators’ attempts to deliver clarity.

Firms that provide advice on defined benefit pension transfers will be aware that it is not always straightforward to obtain details regarding the scheme and the member’s benefits. Firms may send a list of detailed questions only to receive a standard reply stating that the scheme does not respond to questionnaires and instead listing what the scheme believes is the necessary information.

While this is doubtless frustrating from the firm’s point of view, it is understandable from the scheme’s perspective as responding to detailed questions presented in as many different ways as there are firms sending them clearly requires a degree of manual input that is likely to be disproportionately time-consuming and labour intensive. The Pensions Regulator (TPR) is known to have told the FCA that scheme administrators were sometimes frustrated by requests for excessively detailed information.

The process was clearly a candidate for efficiency gains to be made through greater standardisation. The surprise, perhaps, is that it didn’t come sooner!

From there, with the rapid and significant increase in demand from advisers in the wake of ‘pension freedoms’ created in the Pensions Act 2015, the wider issue was recognised in the occupational scheme world and it was an obvious next step for attempts to be made to standardise data that should be provided across all schemes.

As a result of this realisation, TPR and the FCA worked with The Pensions Administration Standards Association (PASA), assisted by the Personal Finance Society and the Personal Investment Management and Financial Advice Association, to develop and roll out a scheme template, a member template and guidance on their websites in July 2019.

These organisations have encouraged both members and non-members to use it on a best practice basis.

FCA Template

The FCA consulted (GC20/01) on a form of the template, slightly different to PASA’s version. Given their involvement in the relatively recent TPR version, it seems unfortunate that the proposed FCA version is different. However, the FCA justifies this by stating that its version focuses on the information that the FCA thinks advisers need to have to give advice, rather than the way scheme administrators should provide the information. A copy of the proposed scheme data template is contained in Annex 1 of GC20/01.

The FCA has discussed the template with PASA and TPR and it has been agreed that advisers should still accept the scheme data information if it is provided on the PASA template, or in any other form.

In any case, the FCA expects that the data in either form should enable advisers to carry out the necessary comparisons and analysis required under the rules and guidance relating to advice on pension transfers.


The template is intended to cover most of the benefits found in schemes, but it is inevitable that some schemes will have non-standard benefits that may need further clarification. So there could still have to be follow up contact between firms and schemes but the whole process should be more efficient for all parties.

Workplace schemes (WPS)

Since 1 October 2020, it is a requirement that any recommendation to transfer should consider an available workplace scheme as the preferred destination for transferred funds unless an alternative personal plan can clearly be shown to be MORE suitable. You can read our previous articles on this topic here.

As a WPS is by definition a defined contribution scheme, the scheme data template(s) described above are not appropriate as a means of requesting WPS data. That presents an opportunity for a WPS data request template to be created.

Our View

It is a truism in business management that standardising processes where appropriate and possible is likely to improve consistency and efficiency. To that extent, the availability of a standard scheme data template (even if there are two options) should be embraced by firms.

Expertise will still be required to know when the nuances of a particular scheme or member might need specific questions to be asked, either initially or as a follow up to the scheme’s response.

The consultation on the template and all other topics covered in GC 20/01 closed on 4 September and final guidance is expected in the first quarter of 2021. It is possible that the template will be tweaked following the consultation feedback but past experience suggests that any tweaks will be minor so the template in GC20/01 is a good place for firms to start.

It is important to note that the scheme data template will NOT form part of the Finalised Guidance, but should be considered as good practice.

Professional Paraplanner