Investment consultancy and human resources firm Mercer has come under fire after taking ten months to complete a defined benefit (DB) transfer.
Philip J Milton Chartered financial planner Felix Milton (pictured), told RP’s sister publication Professional Adviser he posted all of the necessary documents for the DB transfer to Mercer on 24 September 2018. The client wanted to transfer out of the Kerry Retirement Benefits Scheme.
Milton eventually received the payment on 29 July – some ten months after the application to transfer was submitted. Milton said he worried whether the guaranteed transfer value would remain or not. But, luckily for the client, it had increased.
The Devon-based adviser said: “This is abnormally long – some [transfers] can be done in as little as two weeks. It all depends on the scheme, the scheme administrators and how they choose to act.”
According to Milton, on several occasions Mercer told him and his client the scheme trustees were carrying out due diligence on the application, which was why it was taking so long. The Chartered financial planner said Mercer’s responses were “odd” because they had had the relevant paperwork for so long.
“That was supposedly everything they needed for the transfer and they dragged their heels a bit,” he added. “They said there wasn’t [documents] – and then said there was.”
‘Mercer aren’t doing it’
On 14 June 2019, Milton’s client received an email from the sponsoring scheme employer saying it had taken the transfer back in-house because “Mercer were not doing it”. The scheme said it would “work with Mercer to get it done”.
Following the email, Milton said, the client immediately received the payment. “It looks like they’ve done it quickly because the [sponsoring scheme employer] has got involved – clearly they weren’t happy with Mercer either,” he added.
“These are the biggest DB scheme administrators in the country so they should have robust processes in place to be able to do [the transfer], but clearly not. It’s not really good enough for it to take ten months.”
In April, Milton and his client submitted a complaint to Mercer, which the firm acknowledged on 6 June. However, the adviser said it does not appear to have been acted on any further.
Milton understood the complaint was different to one against a financial adviser and so it would be treated differently, but he felt Mercer still should have offered a response.
He said the client had been deferring investment choices because he wanted to check where he was and make sure all the transfers had settled.
‘Four to 191 days’
In response, a Mercer spokesperson said it seeks to ensure it provides a process which is “reliable, robust and low-risk”.
They added: “While Mercer is unable to comment on individual cases, the seriousness with which Mercer, its trustee clients and The Pensions Regulator take liberation scams does mean that occasionally a transfer settlement may take longer than anticipated.
“Our own review of recent transfer settlements demonstrates that a response from HM Revenue & Customs may take as few as four days and as many as 191 days to receive.”