Standard Life’s head of pensions strategy Jamie Jenkins has said the provider is “quite aligned” with the Pensions Ombudsman over the approach to pensions transfers, following a series of landmark decisions which saw one complaint against the insurer partially upheld.
Speaking during a video interview with Money Management editor Jon Cudby, Mr Jenkins acknowledged the rulings, which broadly backed providers while emphasising the statutory right to transfer, imposed limits on the action providers could take to prevent so-called ‘liberation’.
In fact, in the case against Standard Life over a declined request to transfer out of its Sipp, the ombudsman said the firm should have considered its right to act with discretion and refused to consider redress primarily on the grounds the suspected liberator had since failed.
However, Mr Jenkins said that the wider issue, especially ahead of new pension freedoms which could make life easier for scammers, was that outgoing ombudsman Tony King also highlighted strongly the need for caution on pension switches which accords with the providers’ approach.
He said: “Ultimately if people are insistent they can, usually if they have the right, transfer their money away. We can stop a transfer but there may come a point when the Ombudsman rules that they have a right to move on.”
In two other cases, Aviva and Zurich saw complaints over transfer requests related to occupational schemes dismissed due to legislation which limits the obligation to process a transfer from a workplace scheme to another bone fide workplace pension.
Mr King did, however, say that all three providers had failed to properly consider the legislative position or the right to transfer.
Mr Jenkins agreed with increasingly vocal concerns from a number of fellow insurers and pension experts that the introduction of new pension freedoms in April it will in theory create a paradise for those seeking to scam people out of their pension money.
In fact, he said his firm was already starting to see liberators “changing and adapting how they work” to avoid going through the rigour of setting themselves up as a pension as people will simply be able to invest cash withdrawn from their pension.
“Criminals are thinking rather than do all that stuff we used to do, let’s just focus on the individual who can access their cash and we’ll set up as - or pretend to be - an investment scheme... promising for example 20 per cent per annum guaranteed.”
He said it was therefore “crucial” than providers and advisers “raise awareness” and encourage people to taker advice before transferring.”
