Scams that target pension scheme members and their retirement benefits are a growing and persistent problem that is intensifying problems faced by members amidst the cost of living crisis in the UK. These scams can leave catastrophic impacts to members and their families at a time where there is enough for them to deal with in their daily lives. It is essential that trustees make stopping pension scammers their priority.
Recent research conducted by the Pensions Management Institute gave an eyewatering insight into how much concern there actually is on the risk of pension scams, as 92% of Trustees have indicated that they have fears their members approaching retirement will be targeted by scammers. This shows that more needs to be done to ensure that members are well protected and well educated into the practices and methods that will attempt to mislead them into falling into the trap of a pension scam, hence why stopping pension scammers should be a priority for the industry.
In August this year, The Pensions Regulator unveiled a ‘new scam-fighting plan’ that aims to protect savers. Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “Our new scams combat plan sets out to make savers aware of the risk of scams, encourage schemes to adopt higher standards of protection for savers’ pots and secure the intelligence we need to work with others to pursue and punish criminals.” As part of this, she stated that “We expect industry to lead the way in thinking of innovative ways to protect savers now and in the future.” This shows TPR expects that the whole industry has a part to play in protecting the members of our pension schemes.
Within this plan, TPR announced a three-pronged strategy that aims to:
- educate industry and savers on the threat of scams
- prevent practices which can harm savers’ retirement outcomes
- fight fraud through the prevention, disruption and punishment of criminals
All Trustees should open up a dialogue with their advisers to see what more they can do to get the message across to members regarding the risks of these potential scams. As well as this they should review their controls and processes to ensure that their members are well protected and attempt to prevent any pension scam occurring.