In a week that the Financial Conduct Authority is increasing its scam smart, scam awareness campaign, a pension scam has been highlighted by the BBC that has left some ex-soldiers in fear that their pensions have been lost and want to see the Ministry of Defence pay them back.
A group of ex-soldiers were persuaded by rogue sales people to transfer their frozen military pensions to an unregulated pension scheme that was not checked or verified by the Ministry of Defence (MOD) into a Pinnacle Pension Scheme.
As featured on the BBC News, one of the soldiers that transferred into the Pinnacle Scheme, left the Army in 2011 when he was 32 and wanted to start a family. His pension was about £40,000 and now fears his money is lost.
The soldiers feel that the MOD did not check or verify the salesperson or the pension company. If they hade they would have realised that Pinnacle had no money in the bank or any employees. Monies had been invested in another company which was closed and a trustee company for Pinnacle was also closed by the Government in 2018.
The Government way back in 2013 recognised problems with unregulated pension transfers and warned pensions organisations to be aware of any risks, but the soldiers feel the MOD did not follow the Government’s advice.
The MOD has commented saying: “Back in November 2013 transfers to these kind of schemes were put on hold, when scheme administrators where made aware of the risks”.
The reality is that now, pension scheme trustees are liable to verify that any pension scheme transfer is being made to a legitimate and recognised pension scheme, in addition to authorised financial advisers also required to be involved and sign off any such transfer. This was not the case 6 years and it is a little bit of 'closing the gate after the horse has bolted'. The only way to rid the industry of rogues is to 'kill off' honest, hardworking financial advisers and pension scheme trustees with over burdensome red tape and costs but to track the rogues down and jail them for a long period.
If this were the crown jewels being stolen, there would be a national outcry and global action to find the thieves. If this were MPs pension being raided, you can guess that all manner of secret services and other security forces would be used to crack down and find the rogues. The same high profile crack down shoudl be deployed for financial crime. How is it that bank accounts can even be opening for criminal proceeds?