The Occupational Pensions Regulatory Authority is to issue a warning about pension liberators. The regulator is warning trustees that they should consult Pensions Update 132, an Inland Revenue document, and check a scheme is genuine before signing off a transfer.
The Pensions Update 132 describes liberating as when companies offer to convert unsuspecting consumers' pension funds into an immediate tax-free lump sum, avoiding tax payments.
The promoters of these scheme often charge 20-30% of the amount extracted in the form of commission, according to the update, and pension scheme members are being targeted and exploited by these promoters.
The abuse of the pension transfer system is considered to be extremely serious, according to the Inland Revenue. If the Revenue catches up with the individual the entire fund is liable to 40% tax, as well as the commission by the liberator.
OPRA are trying to discourage liberating by targeting the members and making them aware of the problem and, thereby, discouraging liberators from approaching people.