Trustees are being abandoned by the Pensions Regulator when it comes to battling spurious liberation schemes, John Newman has claimed.
Mr Newman, pensions director for Broadstone, claimed despite efforts by the Pensions Regulator, HMRC and the Financial Services Authority to crack down on pension liberation schemes, all responsibility is still focused on the trustee.
Mr Newman said: “Trustees want to be able to say no to a transfer, where they believe that it is going to a pension liberation arrangement, and have the support of the regulator. Trustees and the regulator have a joint objective to protect the benefits of members.
“It appears that, in this instance, the regulator is passing all of this joint responsibility to just one party: the trustees.”
He said trustees should also have powers to prevent a transfer and to be able to seek guidance from HMRC and the Pensions Regulator on suspicious schemes.
The remarks come after B&CE, provider of the People’s Pension, criticised the 2013 Budget for failing to tackle pensions liberation as part of a crackdown on tax avoidance.
Christine Brightwell, director of regulatory governance and risk for B&CE, said: “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 also if we employ automatic transfers for small pots in the future.”
Right of reply
A spokesman for the Pensions Regulator, said: “We have been clear that the responsibility for tackling pensions liberation fraud falls upon a number of organisations, as well as trustees and individual scheme members.
“It is by working together that we can disrupt and, most importantly, prevent this activity. Our guidance makes clear that trustees have fiduciary duties to act in accordance with members’ best interests.”
Adviser view
Andrew Oliver, co-director of Kent-based Andrew Oliver & Co, who has had calls from lead generation firms and advisers trying to sell pension liberation schemes, he said: “The industry can well do without these types of advisers and the lead generation companies they are using telling people that they can access their pensions before age 55.”
