Personal pension providers are struggling to implement changes to computer systems to comply with new rules concerning the provision of illustrations of retirement income, according to e-business software firm Aqera.
The company says some providers will not meet the 6 April 2003 deadline for the new regulations and costs will be amplified by as much as 500% because of the burden of updating multiple, outdated legacy systems. Aqera estimates the industry bill for IT changes will be over £19m, based on conservative regulatory assumptions.
The Statutory Money Purchase Illustration (SMPI) from the Department for Work and Pensions (DWP) requires that all members of money purchase occupational schemes, stakeholder pension schemes and personal pension schemes receive an annual illustration of what future pension might be.
Ed Holt, managing director of Aqera, says: "Most (companies) have instigated projects that will complete in the first quarter of 2003 but although the scale of the issue has been clear for some time, 100 per cent compliance from 6 April is very unlikely."
Aqera is offering pension providers a a pre-built software engine that provides SMPI and FSA illustrations and can be integrated with existing administration and point-of-sale systems.