Proposed Pension Schemes Bill amendment to combat scams 'pivotal' - PSIG

The amendment Work and Pensions Committee (WPC) chair, Stephen Timms, is expected to table when the Pension Schemes Bill returns to the House of Commons will be "pivotal" in combating scams, the Pension Scams Industry Group (PSIG) has said.

The amendment, initially proposed by PSIG, seeks to give trustees the ability to refuse a transfer that is showing signs of a scam.

In response to the WPC's ongoing pension scams inquiry, launched in July, PSIG deputy chair and Phoenix Group risk and financial crime manager, Tommy Burns argued that measures in the current bill, whilst welcome, do not go “nearly far enough” in protecting members.

Burns said that pension scheme trustees must be given the ability to refuse transfers when sufficient pension scam concerns are identified.

He continued: “Trustees do not have this at present. Even if checks identify concerns, the overriding challenge is that, as the transfer is typically to a UK pension scheme, a statutory right to transfer is likely to exist.

“Although the pension scheme will be UK based, the investments which it then facilitates are frequently unregulated and high-risk overseas investments.

“It is this exposure and the abuse of the UK regulatory framework which has prompted Phoenix Group and PSIG to propose an amendment to the Pension Schemes Bill which will be tabled by Stephen Timms MP, Chair of the Work & Pensions Committee, when the bill is returned to the House of Commons."

Burns argued that the industry needs a “far better means of stopping transfers” than is currently in place, stating that this amendment would “give us this ability”.

The People’s Pension and The Police Foundation, today (7 September) also published a joint report, calling on the government to provide pension companies with greater powers to tackle pension scams, such as the right to override the statutory right to transfer, after it revealed that 62 per cent of savers had insisted on a transfer regardless of the risk.

The Pensions Schemes Bill recently passed through the House of Lords following its third reading, before being presented to the House of Commons on 16 July.

The date for the second reading of the bill in the House of Commons has not yet been announced.

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