The Department for Work and Pensions (DWP) has published new rules that will give pension scheme trustees even greater powers in connection with blocking pension transfer scams.
Old Rules: Pension scheme members have a statutory right (i.e. the legal right) to request and secure a pension transfer to a new pension scheme if allowed. Existing pension scheme trustees are not allowed to block the transfer but must complete due diligence in checking that it is a legitimate scheme, but they can only issues warnings of scams and are not allowed to block a transfer.
New Rules: Pension scheme trustees will now have the power to totally block a transfer if they fear it is a scam or if they are not sure.
Whilst this is a good move to protect consumers from scams it is perhaps also a blame game. Guess who will be blamed and then have to pay compensation if the transfer turns out to be a scam? Pension scheme trustees will need to be extra vigilante and complete even greater due diligence to not just protect consumers from scams but also themselves from any liability.