An industry group is being formed to develop a code of practice to help industry professionals tackle pension liberation scams.
The newly formed Pensions Liberation Industry Group (PLIG), which is being led by Pensions Administration Standards Association chairman Margaret Snowdon OBE, is working on an industry code of practice of due diligence for pension transfers. The group includes trustees, administrators, legal advisers, insurers, regulators and consumer representatives.
PLIG hopes the code of practice will act as a barrier against scams by requiring the transferring scheme to obtain information or evidence to provide reasonable assurance that the receiving scheme is valid, formulating appropriate discharge forms and encouraging transparent communication between members and other parties and the reporting of suspect cases.
Pension liberation cases reached record levels in 2013, with pensions minister Steve Webb stating in October that £420 million of pension savings had been transferred to liberation schemes.
The work around the development of a code of practice will also explore a “safe harbour” agreement for trustees and providers who follow it. It will also examine best practice for handling transfers to Sipp, Ssas and Qrops arrangements, dealing with straightforward “white listed” transfers, managing tax liabilities, handling complaints and insistent customers and lobbying for legislative or regulatory change.
Snowdon, who is also a director at JLT Employee Benefits says: “Pension liberation needs to be halted in its tracks before it takes hold of the industry and infects the very foundation of pension savings.
“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 says: “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.”