The Pensions Administration Standards Association (Pasa) has launched a consultation on its Defined Benefit (DB) Transfers Code of Good Practice.

Pasa president, Margaret Snowdon, announced the consultation at the Pasa Annual Administration Conference, stating that the overall aim of the code was to create a “balance between safety and speed” of DB transfers.

Other objectives are the improvement of communications and transparency in the processing of transfers, and increased efficiency from administrators.

The code’s principles dictate that member communications be fair, clear, unbiased and straightforward, while members should also be kept informed of any delays in processing.

Additional principles included working with other stakeholders to encourage adherence to the code’s objectives, use of communications designed to reflect best practice, such as template documents, and working practices should be designed to comply with the code, including the target timescales listed.

Snowdon said she thought 80 per cent of transfers could probably be processed “very quickly indeed”.

Pasa produced straightforward transfers guidance last year and, instead of producing part two for non-standard transfers, created the code as, although it is voluntary, it can be stronger than guidance.

Furthermore, they are looking to provide a quality mark for those that comply with the code and possible accreditation in the future.

Snowdon explained: “What we are really looking for is administrators and other stakeholders to take it seriously and adopt the code where it is practical to do so. It doesn’t mean everybody has got to go out and wholesale change all their processes.

“We like to think a lot of the processes will fit but some might be aspirational, in which case we ask you to aspire.”

Commenting on the code, Pasa DB transfers working group chair, James Ellison, said: “We are extremely mindful of needing to find the balance between member protection and their statutory right to take their pension in a different shape or form, via a flexible arrangement. As a group, our key objective is to create a framework to help deliver this balance.

“This code sets out to create faster, well-communicated, efficient and cost-effective strategies scheme administrators and wider stakeholders can execute.”

When asked about average transfer times, Snowdon said the code was looking at targetting DB transfer completion within around 20 days, splitting the process into two segments; contacting the member or IFA and receiving a reply from the member or IFA.

The code states that the first segment should be completed in between 7 and 10 working days, or between 12 and 15 working days where referral to to the actuary for review or sign-off is required.

The second segment should take between 9 and 12 days, according to the code.

She stated: “We’re looking at roughly 10 days on average for both of those but we don’t have any metrics that say how long it takes because it is literally ‘how long is a piece of string?’.”

Snowdon added: “We are not trying to get speed at all costs, we just think that some transfers can be done much more quickly. If a transfer calculation is automated you’re talking nanoseconds to get the calculation itself done so the other ten days is a lot of administrative processing, checking, verifying stuff, and manual calculations.”

Administrators can give feedback on the code by answering Pasa’s consultation questions by 30 April.

The code is expected to be released in September 2020, and schemes and administrators will be given 12 months to comply with the code.

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