Gov Gets Tougher On Pension Transfer Scams

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.

Comment

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.