Criterion has responded to the Financial Conduct Authority’s (FCA) Discussion Paper: ‘pensions: adapting our requirements for a changing market’. The paper discusses the impact of the ongoing 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.
We provided commentary solely on paragraph 4.10: 'there are practical challenges to us introducing measures to pursue these objectives:
- Measures can sometimes appear to be contradictory. For example, measures to ensure the consumer is well informed might affect how quickly firms process a transfer request.
- There is no single consistent DC transfer journey:
- the consumer can request the transfer via the ceding or the receiving scheme
- the receiving scheme might be one of the consumer’s existing pension plans, or it might be a new pension that is set up specifically to receive the funds or assets from the ceding schemes
- it is increasingly likely that one or more of a consumer’s ceding schemes, or chosen receiving scheme, will be regulated by The Pensions Regulator (TPR)'
Our response
While the FCA notes the complexity of transfers - given the varying initiation points and regulatory oversight – we provided an argument that a predominant transfer model already exists and is widely used.
This journey, facilitated by our Common Declarations wording, follows a ‘one-legged’ transfer process initiated by the customer via the receiving scheme. The Common Declarations standardise key customer authorisations, eliminating delays caused by ceding schemes’ administrative processes.
It was emphasised that this approach is already embedded within the Origo Transfer Service and the TISA eXchange (TeX) transfer communities, covering a significant majority of DC pension transfers. With both FCA- and TPR-regulated schemes participating, the model has significantly reduced transfer times.
As a result, we urged the FCA to use this well-established framework as the foundation for any future regulatory changes, rather than pursuing an entirely new model. The efficiency gains achieved demonstrate that the existing structure is a strong starting point for further industry-wide improvements.
STAR’s response
STAR is a joint venture between Criterion and TeX, who set up STAR in 2019 to help combat transfer delays and accredit firms for their performance in the transfer of pensions, investments and savings.
Andrew Marker, Chair of STAR and Head of Retail Pensions at Vanguard Asset Management, also provided a response to the FCA’s Discussion Paper.
Key Discussion Points:
Transfer delays and industry standards: STAR emphasises the need for Common Transfer Standards to reduce delays. Since 2018, some pension firms have continued using outdated processes like paper documents, slowing transfers. From 2026, STAR will require members to submit Management Information (MI) to track and address transfer delays.
Technology and process improvements: while firms can adopt digital solutions, debates persist about whether manual processes are equally efficient. STAR’s Full MI data will track transfer times, comparing manual vs. electronic processes. Resistance to electronic transfers remains, particularly for complex investments and offshore assets. Effective customer communication is also a key factor in STAR’s accreditation process.
Transparency and reporting: STAR supports regular reporting to drive industry improvements. Enhanced MI collection will track end-to-end transfer times, offering customers clearer expectations. STAR’s accreditation framework encourages firms to be transparent about performance, benefiting both the industry and consumers.
STAR collaborates with regulators, including the FCA, Department for Work and Pensions (DWP), and TPR, to improve pension transfer efficiency. The initiative aims to enhance standards, increase transparency, and ultimately speed up pension transfers.
STAR has been established since 2019, and there is now an industry agreed standard on measuring transfer performance, that could easily be adopted across the industry. Transfers are not seen as operationally efficient, and there are still considerable delays reported in some cases. We believe that consumers do not fully understand the implications that transfers may have, specifically in terms of timely transfers and of financial detriment. What we have created is cheaper than the creation of policy and means consumers can compare the transfer performance of the companies that are STAR accredited and adhere to specific standards around transfers. STAR is a ready-made solution that is provided by established, independent organisations that operate as not for profit and have been successfully collaborating with the industry for over five years. It would be a shame to reinvent the wheel, when the wheel is already turning.
Andrew Marker
