Scheme mangers and pension trustees will get new powers at the end of November to tackle suspicious transfers as part of government measures to tackle pension fraud.
Working closely with the Pension Scams Industry Group (PSIG) and enforcement agencies, the government has come up with new measures which they hope will raise awareness of the dangers presented by fraud.
Where there are tell-tale signs of fraud or methods frequently used by scammers, trustees and scheme managers will be able to prevent a transfer request, giving it a “red flag”. In other circumstances where fraud is suspected, an “amber flag” will pause a transfer until the scheme member can prove they have taken scam specific guidance from the Money and Pensions Service (MaPS).
Pensions Minister Guy Opperman commented; “We are tackling the scourge of pension scams in practical terms to safeguard pensioners’ hard-earned savings. Fraudsters frequently offer “too good to be true” incentives such as free pension reviews, early access to pension cash, or other time-limited offers. Lured in by these bogus offers, targets are then tricked into transferring their savings into a scam scheme and defrauded out of their savings.”
Helen Morrissey from Hargreaves Lansdown called the measures a ‘welcome step forward’ in protecting scheme members, saying that ‘for too long scammers have been able to rob people of their hard earned retirement savings and pension schemes have been powerless to stop them.’
The government has committed to reviewing the new regulations within 18 months to ensure they remain as effective as possible in targeting the evolving methods used by scammers.