Industry figures have called for tighter regulation of small self-administered schemes in a bid to prevent further activity by scammers.
In October last year, Phoenix reported it had prevented £26m of pension fraud to date, with almost £2m-worth blocked since pension freedoms were introduced in April.
The UK’s largest specialist consolidator of closed life funds identified 1,650 suspicious companies or schemes which it believed were involved in scams, and the firm identified a move to target savers via self-invested personal pension schemes (Sipps) and SSASs.
SSASs are currently regulated by The Pensions Regulator.
However Phil Smith, chief executive of the Embark Group – parent of Sipp providers Hornbuckle and Rowanmoor – said he hoped the Financial Conduct Authority (FCA) could regulate SSASs in the same way as Sipps.
He added: “I see quite a parting of the ways in our sector, which seems to be running away from SSASs , which in many ways is illogical.
“The primary driver isn’t the wrapper itself. So I think people post-retail distribution review have become increasingly concerned about who they work with on a counterparty basis, the quality of advice and, more importantly, the type of assets that are finding their way into products.”
He said he wished the FCA would start regulating SSASs on the grounds they have the same purpose, underlying investments and pension rules as Sipps.
Martin Tilley, director of technical services at Dentons Pensions Management, said his firm had found an uptick in Ssas business in the past two or three years, and year-on-year.
However he flagged concerns with the increasingly mainstream pushing of SSASs, saying: “SSASs, without a shadow of a doubt, are open to scamming sales people.
“Sipp providers now are under a huge responsibility to make sure they look after carefully what goes into their asset book, whereas a Ssas is an individual trust – the assets they accept are decided upon by the schemes trustees.
“If you don’t have a professional trustee who is applying wih the same logic as a Sipp provider to the acceptance of assets, you could find SSASs will be accepting assets they really ought not to be, whether they are scams or they are just inappropriate.
“That worry still exists.”
Mr Tilley said he would not be averse to some sort of increased regulation of SSASs, but would like it to be similar to a historic template of trustees.
He added: “It would be better to have a more proactive body which was able to prevent inappropriate investment or administrative events not being done correctly that resulted in tax charges and fines and reporting and things like that.”
The FCA’s remit is for personal plans, policies and contracts and SSASs to be included in an occupational pension scheme, he said.
Andrew Warwick-Thompson, executive director at The Pensions Regulator, said the regulator was concerned about SSASs being exploited by scammers.