More legislation requiring HMRC to be more restrictive on pensions schemes allowed to have registered status will help the industry’s battle against pensions liberation, B&CE has stated. The financial benefits provider also stated that the vetting process for schemes should be more rigorous.

The advice follows HMRC’s liberation warning, detailing how the process works and what can be done to prevent it from occurring within the pensions industry.

B&CE director of regulatory governance and risk Christine Brightwell commented: “Under current regulation, it is too easy to register a pension arrangement with HMRC. In the future, this will only become more of a problem, not just in relation to the current outbreak of ‘liberation’, but now that the DWP has announced proposed automatic transfers for small pots.

“Schemes can of course carry out due diligence and currently do so. However, it would assist greatly in the protection of members’ benefits if HMRC were once again required to consider a pension scheme’s Deed and Rules before allowing registration. It would further assist if HMRC were also required, by law, to carry out an FSA style ‘due diligence’ check on those seeking to register a scheme.”

In a statement on its website HMRC stated: “HMRC works closely with partner agencies and other regulatory bodies to detect, disrupt and deter pension liberation activity. Action in this area has taken many forms and we have an active compliance team and programme.”

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