However, a number of firms were criticised for the lack of coherent construction of these leaflets and several firms stopped short of actually explaining that exercising an open market option (OMO) can result in a higher pension.
Delays were also found to be rife when it came to annuity transfers, with 60% of the 238 annuity transfer cases reviewed found to be hindered by unstandardised procedures and confusing diversity forms.
Sarah Wilson, director of treating customers fairly (TCF) and insurance sector leader at the FSA, said: “The way that firms deal with pension policyholders provides an indication of how they treat their customers more generally, and we will be looking for firms to demonstrate good practice in this area.”
The Association of British Insurers (ABI) is working alongside the FSA to tackle the education gap on OMO. ABI spokesman Jonathan French welcomed the report and said: “We have long acknowledged that there is room for improvement on the OMO – for example, standards of customer communications are good in some cases; not so good in others.
“We are also working with members to deliver significant improvements on transfer times. All of this work will help to ensure that customers make informed choices at retirement and get the service they rightly expect.” CK
