In light of the recent pension reforms announced in the Budget, Altus welcomes the news that TeX has now completed all the required steps to enable the legal framework to support automated electronic pension transfers.
Altus’ experts in automated transfers believe this to be a significant step forward for the industry introducing a cross industry open standard for pension transfer process allowing multiple suppliers to interoperate. This will drive innovation in the market and lower costs to the consumer. Since the introduction of open standards to the process of ISA transfers in 2013, costs to the investor have dropped down to as little as £1 or less. Altus believes that this will now also be possible for pension transfers in the coming weeks as a result of the framework TeX has now provided.
TeX provides a legal framework to facilitate the automated and electronic transfer of a wide range of UK pension types including GPP/PP, DC, SIPP and Section 32(A). It provides indemnification, liability cover, insurance and SLAs for all parts of the pension transfer process. TeX stipulates the use of the UKFMPG Transfer Market Practice, which incorporates the International Standards Organisation financial services messaging (ISO 20022) over the highly secure SWIFT network.
Ben Cocks, Head of Business Systems at Altus says: ‘Since the introduction of open standards to the ISA transfer process a little over a year ago, we’ve seen timescales to complete transfers shrink to minutes and costs drop significantly below a pound in many cases. We’ve also seen adoption and coverage rates increase dramatically in recent months with 78% of AUA on platforms and 90% of UK retail funds now ‘wired up’, with some of our clients achieving over 80% STP rates for transfers.’
Ben Cocks added: ‘Steve Webb has repeatedly mentioned the TeX approach as being a possible cross-industry solution for the automatic “Pot-Follows-Member” proposals in the current Pension Bill going through Parliament. We are therefore very pleased to welcome the news that the framework is now in place and look forward to announcing the first live open standard pension transfers in the weeks ahead.’