Clerical Medical has closed its doors to new group pension business because its administration is un...
Clerical Medical has closed its doors to new group pension business because its administration is unable to cope following a significant increase in business this year, writes Simon Falush.
The company, which implemented the decision last Friday, will take on new business again in the first quarter of next year. Intermediaries who have already recommended a Clerical Medical product will have it accepted by the group, providing they notify the company by 14 September.
The life office has decided to suspend taking new Futureproof company pension plans. Products that will be affected include group stakeholder, group personal pensions, group occupational money purchase schemes and group AVCs.
Nigel Stammers, head of pension policy at Clerical Medial said the group had increased its administration staff by 80% since the start of the year but the stakeholder deadline in October and the tax deadline in April had increased the flow of business.
He said that there was a rush of business to comply with the stakeholder requirements added to an existing backlog from business that flooded in to beat the April 2001 deadline when tax rules on group pensions were changed.
Stammers said: 'It had reached a stage when we thought it would be better to stop taking on new business than let down intermediaries and customers by making them wait too long.'
Clerical Medical's admin centre in Bristol where the affected products are processed, has grown its staff from 120 in December to 210. Stammers said that group business had increased fourfold over the same period last year. There have been 2,000 new schemes this year representing 64,000 lives, only about one third of which have been processed so far. Stammers said it anticipates taking on another 500 by the deadline. This compares to a total of 600 schemes for the whole of last year.
Stammers said that the company's other two admin centres in Aylesbury and Chevedon are unaffected. This means that products from St James's Place and Halifax, which are not processed in Bristol, will be unaffected but Stammers confirmed that the company was reviewing the situation on taking new business from St James's Place.
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