The Pensions Regulator (TPR) chief executive Charles Counsell has warned trustees to remain vigilant against scams and report any concerns to the Financial Conduct Authority as more savers look to defined benefit transfers.
In a blog post published yesterday (26 May), Mr Counsell said due diligence was key for all DB transfers and trustees “must remain alert to the risk of scammers during the transfer process”.
TPR has previously asked trustees to monitor transfer activity from their scheme and work with administrators if they encounter issues meeting demand.
Mr Counsell said they should also inform the FCA if they come across any “unusual or concerning” patterns when doing transfers, for example spikes in activity or the same adviser popping up across a range of member requests.
TPR chief said coronavirus could cause two major problems for scheme trustees in that cash equivalent transfer values will take longer to calculate than usual and there will be more people requesting them.
Due to this, Mr Counsell said trustees could take advantage of flexibility in legislation that allows up to three months to issue CETV quotations for reasons outside of their control, although they should continue to process requests where possible.
He added that while enforcement action would not be taken against trustees who were unable to meet the deadline or make a transfer payment because of Covid-19-related issues, this relaxation was only in place until the end of June.
Mr Counsell said: “Covid-19 may see savers rush into decisions about their pensions. We don’t want them to rush decisions which they may later regret, or worse still become the victim of scammers.
“That’s why we’ve asked that if a member requests a CETV quotation, you send them a new letter with their valuation warning them such a move may not be in their best interests and urging them to think carefully.”
He added: “In times of volatility and disruption it’s all the more important savers understand a pension remains a good, long-term investment, just as they would need to be confident about any other big investment, such as buying a house.
“If they lose confidence it may make it more likely they may make knee-jerk decisions about their money which may not be in their best interests.
“If we take the time necessary to protect and prioritise what’s important together we’ll keep savers on a securer footing.”
Figures from Canada Life, published yesterday, found that one in five victims had been targeted by a pension scam amid an increase in fraudsters purporting to offer free pension reviews.
It found 5.2m people in the UK had fallen victim to, or knew someone who had been duped by, a financial scam since the beginning of the virus outbreak.
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