We highlight our plans in a response to the FCA’s Discussion Paper: pensions: adapting our requirements for a changing market.

Andrew Marker, Chair of STAR and Head of Retail Pensions at Vanguard Asset Management, has responded to the Financial Conduct Authority’s (FCA) Discussion Paper: ‘pensions: adapting our requirements for a changing market’. The paper discusses the shift from defined benefit to defined contribution pensions, the complexities introduced by pension freedoms, and the need to continually assess and adapt regulatory framework to ensure consumers have the tools, support and protections they need.

In particular, the following discussion points were addressed:

1. Any other factors extend the completion time of a transfer.
2. Firms could improve their processes and technology to enhance efficiency. Pease give us an example and let us know if firms would face barriers in making these improvements.
3. Periodic reporting of transfer times, and associated scrutiny, might incentivise process improvements. And if so, we welcome views on the type of reporting that would be most effective: reporting to the regulators or reporting via external publication for greater transparency.

Discussion point one

In our response to the FCA’s discussion point one, we emphasised the crucial need for a common set of industry transfer standards. Over the past five years, we have collaborated with industry participants to create these standards, using Management Information (MI) to drive consensus. While the planned implementation of dashboards will help customers track their pensions, it will not resolve transfer delays if schemes are not operating on a unified platform.

One persistent issue since the introduction of STAR in 2018 is the complacency of certain pension companies and administrators, who continue to rely on outdated systems and processes, such as sending paper documents and waiting weeks for approvals. To address this, we believe that improving performance across the industry can only be achieved by normalising adherence to a set of publicly available standards. STAR has worked with the sector to develop these standards, which will measure each organisation’s performance in the transfer process.

Recognising that industry discussions have often relied on anecdotal evidence; STAR is taking steps to enhance transparency. Starting in 2026, members will submit MI that will track delays, including those beyond their control, and identify the causes and impact of these delays. This data will help pinpoint areas of the process that require attention to drive improvements.

Discussion point two

Here, we highlighted that to improve efficiency in the transfer process, firms can leverage various technologies across different stages. However, there are arguments that manual processes can sometimes be as fast as electronic processing, and the lack of published data to support either side of this argument only adds to the uncertainty. To address this, STAR’s Full MI data will capture end-to-end transfer times, differentiating between manual and electronic processes, providing clearer insights into customer experiences.

For more complex investments and offshore assets, however, there remains significant resistance to using electronic transfer messaging, with paper or faxed stock transfer forms often still being required.

Another critical aspect of the transfer process is good customer communication, and STAR recognises this by factoring it into its accreditation process. Firms that fail to communicate effectively with their customers will be penalised in the accreditation process.

Discussion point three

We believe that regular reporting and associated scrutiny can indeed incentivise process improvements, and therefore it’s crucial to focus on collecting the correct MI.

STAR is progressing toward a more granular level of reporting on transfer times. By collecting ‘Full’ MI from participating firms, we will be able to assess individual firm performance based on the steps they complete. Additionally, we will publish the average end-to-end customer journey time, which will track the elapsed time from the receipt of the application by the acquiring party to when the funds are available in the new plan. This approach will offer customers a more accurate expectation of transfer times, as opposed to the current reporting, which only reflects the ceding party’s journey. Moreover, collecting data to highlight common issues across all transfers will help identify areas requiring attention from the industry and inform customers about potential delays that could impact transfer times.

The firms participating in STAR and seeking annual accreditation are demonstrating transparency regarding their overall transfer performance. These accreditation results are shared openly within the industry and with consumers.

STAR was designed, in part, to report to the FCA on transfers, driving improved performance and greater transparency, ultimately benefiting consumers. Over the past five years, STAR has received valuable input from the FCA, Department for Work and Pensions (DWP), and the Pensions Regulator (tPR), all of whom are invited to participate as observers in the monthly STAR Steering Group.