Pension scam transfers: a game of two halves
Writing in his capacity as an Advisory Board Member of the Pension Scams Industry Group, Ben Fairhead recently wrote for Mallowstreet on the Government’s consultation on proposed changes to the Conditions for Transfer Regulations.
Ben begins by reflecting on the positive impact the regulations have had since their introduction in 2021, explaining how the red and amber flag framework strengthened protections against scams by enabling trustees and administrators to raise concerns about scam risks and either stop a transfer completely, or require members to obtain guidance from MoneyHelper.
Ben then examines aspects of the regulations which have also created unintended consequences, including the general consensus that labelling “overseas investments” as an amber flag was too broad a category, and has resulted in legitimate transfers being unnecessarily referred to MoneyHelper.
Ben considers the Department for Work and Pensions’ proposed reforms, including the removal of the overseas investments flag and the introduction of a new, and highly anticipated, “reputable scheme” concept. He explains that this approach could allow trustees and administrators to transfer members to schemes they know and trust without having to work through the existing flags.
Looking ahead, Ben discusses the practical implications of the proposed changes, including the need for trustees and administrators to exercise judgement when determining whether a receiving scheme is “reputable”. He also considers the role the Pension Scams Industry Group will play in developing guidance to support consistent decision-making across the industry.
Finally, Ben acknowledges that the proposed regime is unlikely to remove every area of uncertainty. However, he concludes that the changes should provide trustees with greater clarity while continuing to offer strong protection against pension scams and enabling legitimate transfers to proceed more efficiently.
Read Ben’s full article, written on behalf of the Pensions Scams Industry Group, in Mallowstreet, here.
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