Margaret Snowdon OBE leads the creation of an industry group to tackle pension liberation scams
Development of a Code of Practice on due diligence for pension transfers
Margaret Snowdon OBE, Chairman of the Pensions Administration Standards Association (PASA) and Director at JLT Employee Benefits, has led the formation of an industry group with the mission of protecting savers from pension liberation scams. The Pension Liberation Industry Group (“the Group”), whose industry-wide members include trustees, administrators, legal advisers, insurers, regulators and consumer representatives, has been acknowledged by Steve Webb, the Pensions Minister, in a letter to the industry.
Pension liberation cases reached record levels in 2013, with the Minister stating in October that £420 million of pension savings had been transferred to liberation schemes. Pension liberation scams continue to come at a great cost to pension scheme members, trustees, providers and administrators; as well as threatening to undermine confidence in retirement saving.
Members of the Group will work on a voluntary basis, with the ultimate aim of producing a Code of Practice that sets the standard for dealing with requests by pension scheme members wishing to transfer funds from a UK registered workplace pension scheme to another registered pension scheme.
It is expected that the Code of Practice will act as a barrier against scams, by requiring:
• The transferring scheme to obtain information/evidence to provide reasonable assurance that the receiving scheme is valid
• Reasonable steps to minimise delay and provide reassurance to all parties
• Appropriate discharge forms
• Transparent communication with members and other parties
• The reporting of suspect cases
The scope of the Code of Practice also includes:
• Exploring a “safe harbour” agreement for trustees and providers who follow the Code of Practice
• Handling transfers to SIPP, SSAS and QROPS
• Dealing with straightforward “white listed” transfers
• Managing tax liabilities
• Handling complaints and insistent customers
• Recommendations for legislative or regulatory change
Margaret Snowdon OBE, PASA Chairman and Director, JLT Employee Benefits, comments:
“In 2013 we campaigned to highlight and educate members about this unscrupulous activity and I am delighted that we have secured an experienced and committed industry-wide working group. Together, we will create a Code of Practice covering all areas of pension transfers that the industry can adopt to limit pension liberation cases. As well as setting out industry guidelines, we will also be making recommendations for legislative and regulatory changes.
“Our first meeting takes place on 3 February 2014 and we will work toward the launch of a robust Code of Practice by the beginning of Quarter 2, 2014.”
The Pensions Regulator’s Victoria Holmes said:
“There is no silver bullet to halt this activity and it’s only through the industry working closely with regulators and Government that we can prevent people’s hard-earned retirement savings falling into the hands of pension predators.
“Pension scheme trustees and administrators are at the front line in the battle against these scams and we welcome this opportunity to work with them to preserve money in legitimate schemes.”
Pension Liberation Industry Group Members: