UK Pensions - A new regime for pension scheme transfers
Most members have a statutory right to transfer their pension benefits to another pension scheme. Trustees are not currently able to prevent transfers from occurring where members have such a right, even if they are concerned the member might be scammed. In order to tackle the risk of scams, the Government included provisions in the Pension Schemes Act 2021 designed to prevent trustees from paying a cash equivalent transfer value unless certain conditions are satisfied.
The Government has now published a consultation on draft regulations which will require trustees to ensure that at least one of four conditions is met before a transfer can proceed. This will give trustees a valuable weapon in the fight against scams, but it is something of a double-edged sword. The proposed regulations will place new and potentially onerous obligations on trustees, with the risk of member complaints if they get it wrong.