08 Mar 2022 | General News
If you’re considering transferring your benefits out of the Plan there are new measures in place to help protect you from falling victim to a ‘Pension Scam’.
New transfer regulations
Whilst most pension transfers are legitimate and can proceed with minimum intervention, it’s easy to be taken in by that once in a lifetime offer and lose everything. With pension scams continuing to increase the Pensions Regulator (TPR) recently published new regulations, that require the Trustee and Administrators of pension schemes to do more checks on certain transfers, to make sure you’re not falling victim to a scam.
The new regulations, arising from the Pension Schemes Act 2021, introduce a system of red and amber flags whereby the Trustee may not be allowed, by law, to proceed with your transfer if there's a heightened risk it may be part of a scam. You may also be required to take further advice from the Government’s MoneyHelper service before the Trustee can implement your transfer request.
The Plan Administrator (WTW) already undertakes several checks before it approves a transfer and these checks are there to help protect you. The checks may change over time, as pension scams evolve, but currently include:
- Checking that the receiving arrangement is registered with HMRC and is approved to receive pension savings.
- Checking that the company or individual who has advised you to transfer is duly authorised to do so (applicable to transfer values greater than £30,000); and
- Writing to you to confirm your identity.
Where additional checks are required, WTW have a ScamScan team who will contact you to arrange a convenient time to speak to you about these. This will involve their transfer specialists calling you to ensure your benefits are protected.
How to spot a scam
To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) recommend following four simple steps:
- Step 1 – Reject Unexpected Offers
If you’re contacted out of the blue about a pension opportunity, chances are it’s a scam. Pension cold calling is illegal, and you should be very wary. An offer of a free pension review, from a firm you’ve not dealt with before, is possibly a scam.
- Step 2 – Don’t be rushed or pressured
Take your time to make all the checks you need — even if this means turning down what seems to be an ‘amazing deal’.
- Step 3 – Get impartial information or advice
You should seriously consider seeking financial advice before changing your pension arrangements.
- Step 4 – Check who you’re dealing with
Search ‘ScamSmart’ on the internet and you’ll find the page on the FCA website to help you avoid investment and pension scams. This interactive page will take you step by step through how to check an investment or pension opportunity.
For more information on how to avoid being scammed, visit the FCA’s “ScamSmart” website.