HM Treasury and the Department for Work and Pensions have published a joint consultation paper setting out a package of measures aimed at tackling pension scams, including proposals to limit members’ statutory transfer rights. Proposals include:
- a ban on cold calling in relation to pensions to help stop fraudsters contacting individuals. This will be achieved through primary legislation. The proposed ban is intended to catch various types of pension scams, including ‘free pension reviews’ and misleading offers of high return pension funds. The consultation paper outlines some of the phone conversations that are intended to fall within the scope of the ban;
- limiting the statutory right to transfer to some occupational pension schemes. Limiting the statutory right to transfer to some occupational pension schemes will address one of the key routes used to access people’s pension savings through a fraudulent pension scheme. Under this proposal, a statutory right to a transfer would exist only where: (i) the receiving scheme is a personal pension scheme operated by an FCA authorised firm or entity; (ii) a genuine employment link to the receiving occupational pension scheme could be demonstrated, with evidence of regular earnings from that employment; and (iii) the receiving occupational pension scheme was an authorised master trust; and
- making it harder for fraudsters to open small pension schemes. The consultation paper notes that one way to make it harder for pension schemes to be registered with HMRC for fraudulent purposes, would be to ensure that only active (i.e. non-dormant) companies can be used for scheme registrations.
The deadline for comments on the consultation paper is 13 February 2017.