Retiring from a pension scheme needs to be quicker and simpler. JLT has put in place two key measures to make this easier for members
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Pensions Freedoms mean that more members than ever are drawing their benefits from pension schemes – some £4bn more in the first year of these freedoms. Members are rightly now regarding their retirement savings as a flexible form of income that they want to access promptly and efficiently when they choose to do so.
It is vital that the experience for members taking benefits is high-quality and very efficient but also robust enough to avoid potential fraud and unlawful liberation. At JLT, we’ve recently launched two new initiatives to help members transfer their benefits more quickly and easily, based on the feedback we have received from our clients.
Firstly, we are all familiar with the length of time it can take to transfer a pension with various rounds of paperwork, advice, quotations and more paperwork. We see a fair challenge from members, Trustees and Government to reduce transfer times – in particular, the Treasury reports an average of 39 days for a transfer of a trust-based pension! Because of this we have worked with Origo to implement their ‘Options Transfers Service’.
Pensions Freedoms mean that more members than ever are drawing their benefits from pension schemes”
The Options system applies to DC pensions, for example to move from an occupational DC scheme to a SIPP or other personal pension plan, often because the member wishes to access (tax-free) cash available to them. JLT is the first third-party administrator to use this automated system for pension transfers which was originally designed by and for the insurance industry to pass transfers and annuities between insurers. We currently have this live for selected transfers-in and this is expected to reduce the average transfer time for a member to 9 days, a whole month more quickly than previously! This enables members to access their retirement savings quickly when they need to.
Options also provides for full audit and reporting capability for the entire end-to-end transfer process, enabling JLT to fulfil the new regulatory requirement for TPR-regulated pension schemes to report on an ongoing basis how they are performing in processing transfers. Furthermore, as Auto Enrolment continues to provide new challenges for administrators and trustees, the Options Transfers service is perfectly positioned to help relieve this pressure.
Secondly, as part of our drive to make things easier for members, JLT is deploying online identity verification for members at retirement. Instead of having the chore of sending in identification documents such as birth certificates, JLT has adopted technology that means we can do that verification using the information available. This makes the process easier, more secure and less costly for the member as well as letting them keep hold of these documents in case they need them.
These are two of the ways that JLT is making it easier for the member to access their retirement benefits”
This system is designed with the Joint Money Laundering Steering Group’s guidance in mind and ticks the critical boxes as part of JLT’s wider anti-financial crime strategy. Overall the system is easier for the member, easier for JLT and offers the needed security.
The implementation of online identity verification has been very successful and JLT is working to see if we can extend this more widely to other situations, for example address changes, bereavement cases and bank account changes. The process of changing details with an administrator has not moved on in the last 30 years! JLT is at the forefront of these changes to improve the overall experience for members and to help offer the necessary protections for Trustees.
As the largest private sector administrator in the UK covering nearly 5 million members, JLT leads the market and is rightly at the forefront of improving the experience for the members. The adoption of Origo Options and online identity verification are just two of the ways that JLT is making it easier for the member to access their retirement benefits.