Eight UK master trusts have launched an initiative to explore how open standards could improve pension transfers, as the Pensions Dashboard Programme (PDP) passes 70 million connected records.
The steering group, Pathfinder, includes NEST, NOW: Pensions, The People’s Pension and Smart Pension. It will examine how pension transfer infrastructure could be modernised through the use of open, interoperable standards.
The initiative aims to establish common data and messaging rules that would allow master trusts, administrators and technology providers to exchange transfer information consistently and securely.
Pathfinder will provide a forum for participating pension funds to review transfer activity, share operational experience and assess what is needed to support smoother and more efficient transfer journeys across the sector.
One area under consideration is earlier pre-transfer validation using open standards. The approach is intended to identify data discrepancies and potential causes of transfer rejection before a transaction progresses, helping reduce drop-out rates and improving member engagement.
According to the group, many pension transfers still rely on paper-based and manual processes, creating operational inefficiencies, increasing costs and limiting tracking and audit capabilities.
The first live transfer completed through the initiative in April demonstrated the potential for fully automated transfers to be processed at materially lower cost than traditional methods, while maintaining secure and auditable exchanges between participating organisations.
The work comes as transfer volumes are expected to increase significantly following the introduction of pensions dashboards and the planned consolidation of more than 13 million pension pots worth £1,000 or less.
More than 70 million pension records have now been connected to the pensions dashboard ecosystem, representing around 85% of records in scope. Nearly 1,500 pension providers and schemes have completed their connection, including those in the first four cohorts of medium-sized providers and schemes.
Connections are scheduled to continue until the final deadline of 31 October 2026, ahead of the dashboard’s planned launch in the 2027/28 financial year.
Sue Whittington, chief operating officer at Smart Pension, said that master trusts need transfer processes that match the scale and expectations of today’s market and the significant rise in transfers expected in the coming years.
Angela Staral, chief operating officer at The People’s Pension, added that the launch of Pathfinder represented a promising first step in assessing how open standards could improve defined contribution pension transfers.
Gavin Perera-Betts, chief customer officer at NEST, said that while transfer modernisation could improve efficiency and reduce costs, safeguards would remain essential to protect savers.
