Govt plans to consult on regulations covering pension scam ‘red flags’

The government intends to consult on all regulations covering pension scam ‘red flags’ after the Pension Schemes Bill receives Royal Assent, Pensions Minster Guy Opperman has said.

In a letter to Work and Pensions Committee (WPC) chair, Stephen Timms, Opperman confirmed that clause 125 of the bill would be “sufficiently broad” to enable the government to set out limitations to the statutory right to transfer unless certain conditions are met.

Additionally, it would be discussing with industry groups then consulting on the regulations around the red flags that could limit the statutory right to transfer once the bill is passed.

The Pension Scams Industry Group (PSIG) and the WPC had previously identified their top four pension scam red flags.

These were if the receiving scheme or parties in the transfer did not having the required permissions from the Financial Conduct Authority (FCA); whether the member was contacted via social media, email or cold calling, or was offered free pension reviews or early access to cash; if they were pressured to transfer quickly; and whether the receiving scheme is registered with HMRC.

“I want to ensure that we strike the balance between a thorough consultation and the need to act swiftly in order to offer the maximum protection to pension savers,” Opperman stated.

“In preparation, we are engaging with the regulators, parliamentary colleagues, and industry groups, including the deputy chair of PSIG and project Bloom, to reflect their views in the consultation.

“The powers in the bill also give the government the ability to amend the ‘red flags’ though secondary legislation if necessary to target future scam techniques.”

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