Pension transfer due diligence code due within weeks

A code of best practice on pension transfer due diligence to tackle the growing threat of so-called pension liberation is due to be released within weeks in December, according to the leader of an industry group fighting unlocking.

The Pension Liberation Industry Group leader and JLT trustee solutions director Margaret Snowdon said at an event in London today (25 november) that the code, which will set standards for dealing with pension transfers, was set to be published next month.

The group was set up in February in order to tackle the growing threat posed by liberation fraud, with members including trustees, administrators, legal advisers, insurers, regulators and consumer representatives.

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Pension liberation involves pension savers being offered access to their pension before they become entitled at the age of 55, often through the use of loans which are not permitted within pension scheme rules. Savers unlocking their pension face penalties of at least 55 per cent.

Ms Snowden has previously stated that the code of practice would set standards for dealing with scheme transfers and act as a barrier to scams by requiring additional safeguards, including more evidence on the validity of a scheme, appropriate documentation, and reporting of suspicious cases.

Speaking to FTAdviser, Ms Snowdon said: “It’s in version two at the moment and that’s pretty close to final, so hopefully we will be in a position to publish before Christmas, but if not it would be January. It will be a set of principles supported by some guidance.”

She added that in its current version it runs to about 60 pages.