A central pensions registry funded by a levy on schemes should be established to address the growing issue of small pots says B&CE.
The proposal has been put forward in response to the Department for Work and Pensions’ consultation on small pots, which has been prompted by the introduction of automatic enrolment, which the DWP says will lead to around 4.7 million additional small pension pots in our pensions system by 2050.
Options in the small pots consultation range from small changes to encourage transfers to an automatic transfer system where pension pots could either be consolidated in one or more ‘aggregator’ schemes or move with people from job to job.
B&CE which recently launched The People’s Pension, says the establishing of a central pensions registry is a priority that will save providers a large amount of cost, which can ultimately be reflected in lower charges, make it easier for consumers to trace their pensions and ultimately give them a single snapshot of their entire pension savings.
A central register would facilitate the introduction of combined pension statements says B&CE. For this to work, providers would have to send electronic data to the CPR, which would then be complied and amalgamated into one statement. Requests for a pension fund consolidation illustration would trigger a fully or part automated response direct from the provider.
B&CE says paying for the register through an industry levy would work out cheaper than every provider having to send statements to every owner of a small pot.
Jamie Fiveash, director of customer solutions at B&CE says: “We have been lobbying for years for a solution to the automatic transfer of small pots and believe a ‘pot for life’ is the right of every consumer. The formation of a central pensions register will provide accurate access to all pension entitlement forecasts including State entitlements in one place and will go a long way to resolving this ongoing and growing issue.”