The Pensions Regulator (TPR) has urged the pensions industry (principally pension providers, trustees and administrators) to publicly pledge to combat pension scams and to follow the principles of the Pension Scams Industry Group (PSIG) Code of Good Practice.
TPR has noted that according to complaints filed with Action Fraud, more than £30m has been lost to pension scammers since 2017, but that the figure is likely to be much higher because people often don’t spot the signs of a scam and don’t know how much is in their pension pots.
Minister for Pensions and Financial Inclusion, Guy Opperman has endorsed the initiative and encouraged “all pension providers, trustees and administrators to pledge their commitment to this campaign and help do their bit to crack down on pension scams.” He noted that it will “give these industry leaders a chance to step up ahead of the legislative protections” set out in the Pension Schemes Bill 2019-21. The Bill will make amendments to the circumstances in which a member can transfer their accrued rights to other pension schemes with additional restrictions in relation to the member’s employment and place of residence to be set out in regulations. The aim behind these amendments is to protect members from scams.
Those that make the pledge to combat pension scams will commit to:
- Regularly warn members about pension scams
- Encourage members requesting cash drawdown to get free impartial guidance from The Pensions Advisory Service
- Learn the warning signs of a scam and best practice for transfers by completing the scams module in the Trustee Toolkit
- Take appropriate due diligence measures and document pension transfer procedures
- Clearly warning members if they insist on high-risk transfers being paid
- Report concerns about a scam to the authorities and communicate this to the scheme member
The pledge can be made through TPR’s website: https://www.thepensionsregulator.gov.uk/en/pension-scams/pledge-to-combat-pension-scams
Failing to make the pledge could make trustees and administrators look out of step with TPR’s expectations and the PSIG Code.
We recommend trustees take legal advice in relation to member communications, due diligence measures and governance in this area.
The pensions industry has a duty to protect its members from the devastating impact of scammers