Pensions scams and liberation

What is pension liberation?

Section 18 of the Pensions Act 2004 (PeA 2004) provides the statutory definition of ‘pension liberation’. It applies to:

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both personal and occupational pension arrangements, and
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money that has been taken from a pension scheme, whether directly or indirectly

This money is then used in a way which is not authorised by pensions legislation and/or regulation. In certain cases, this involves tax evasion and/or fraud.

The creation of devices, schemes or arrangements to circumvent the rules relating to pension schemes has been an ongoing issue for the regulatory bodies which oversee pensions in the UK for many years. Pension liberation usually starts with a transfer from one pension vehicle into another pension vehicle. This transfer is usually instigated by an adviser or ‘introducer’ giving a promise of early access to pension savings (ie before

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Latest Pensions News

TPO determination clarifies trustee duties for pre-2021 statutory transfers from occupational pension schemes

The Pensions Ombudsman (TPO) has issued a press release on its determination (CAS-81940-Z2S8) regarding a complaint from a member who transferred from the British Steel Pension Scheme to a small self-administered pension scheme in 2014. Although the transfer was made in line with the member’s wishes, he later argued that the trustee failed to carry out sufficient due diligence to identify and communicate potential scam risks, resulting in a loss of retirement benefits. TPO did not uphold the member’s complaint, concluding that, at the time of the transfer, there was no general, common law or equitable duty of care requirement for the trustee to conduct due diligence beyond what was necessary to meet the statutory criteria under the Pensions Schemes Act 1993. TPO found that the trustee was not legally required to follow the due diligence guidance suggested by the member, such as that contained in the Pensions Regulator’s Action Pack and the Scorpion Leaflet, and had not assumed any responsibility or made representations that would have led the member to rely on such checks.

SPP seeks more clarity in pensions communications to aid neurodiverse adults

Law360: Improving the clarity of communication and language used for savers in the pensions sector would improve accessibility for neurodiverse adults, the Society of Pension Professionals (SPP) said.

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