Have You Pledged to Combat Pension Scams?
Pension schemes have lost a total of £31 million to scammers since 2017. On a more personal level, victims of these scams lose an average of £82,000 when targeted, an amount that could take 22 years to build up in a pension pot.
To combat these scams The Pensions Regulator (supported by the Pension Scams Industry Group) is calling on pension trustees, administrators, and providers to play their part in preventing these crimes by raising their standards by learning to help identify possible scams. They can do this by following the steps outlined in the public pledge, which will raise standards in learning to identify scams earlier.
The purpose of the pledge is to show members that providers intend to protect their members. It could also be useful in supporting the education of providers in the many and varied types of scams currently active and spotting the giveaways. This way providers will be able to offer the right support and advice to their members who might be the subjects of a scam.
Taking the pledge is an opportunity for trustees, administrators, and providers to ensure they are delivering best practice in protecting their pension holders from scams and fraud.
Providers will benefit from being able to offer that confidence to its members. Minister of Pensions and Financial Inclusion, Guy Opperman, commented: “This initiative will also give these industry leaders a chance to step up ahead of the legislative protections outlines in the [Pensions Scheme] Bill”, which is currently waiting for Royal Assent.
Providers make the pledge by committing to:
- Regularly warning scheme members about potential pension scams
- Requesting scheme members who wish to take a cash drawdown seek independent guidance from The Pensions Advisory Service
- Encouraging all relevant staff and trustees to become familiar with the warning signs of a scam and best practice for transfers, by completing the scams module in the Trustee Toolkit
- To study and use resources available on the Financial Conduct Authority (FCA) Scam Smart, The Pensions Regulator and Pension Scams Industry Group (PSIG)
- Becoming a member of the Pension Scams Industry Forum by contacting PSIG (Pension Scams Industry Group)
- Carry out checks on pension transfers and documenting pension transfer procedures with appropriate due diligence measures
- Provide clear warnings to scheme members if they insist on high-risk transfers being paid
- Immediately report any concerns about a scam to the authorities, and communicate this to the scheme member
Once, providers have carried out the steps of the pledge, they can self-certify to demonstrate to members their commitment to best practice. On Self-Certifying, TPR will provide resources that can used for this purpose.
You will find more information on pension scams and how to protect your members from them here.
As part of the AAF 02/07 relevant trustee assurance, AAF 01/20 pension administrator and AAF 05/20 master trust assurance, core transactions, member communications and good governance are tested for the selected period. To show scheme members you are committed to strong internal controls and demonstrating compliance consider the value of an assurance report.
Check out some more related reading from our Head of Assurance below:
Cyber Guidance from PASA for Pension Administrators