Throughout the COVID-19 pandemic, there has been an ever increasing number of pension scams targeted at members and their pension pots. As furlough begins to end, members may be more inclined to look at ways to cash in their pension early and this is a potential ‘gold mine’ for pension scammers.
We have decided to write this blog to share some of the ideas that we have seen throughout our time on audits, as well as the recommended guidance from the relevant bodies. This is a list of some key points, intended to share some ideas as to what Trustees can do to help and protect their pension scheme members.
Make members aware
Members need to be made aware of potential scams. This means Trustees always need to be communicating the risks of scams. This could be done at a regular interval (e.g. Monthly Newsletter sent to members) or within any literature provided at the point of retirement or transfer. If you make members aware of the potential scams that they could face, this could allow them to think more proactively about this risk. As well as this, you should always encourage members to receive impartial guidance from a recognised body (E.g. Pension Wise) when they are considering taking benefits from a scheme.
Work with your advisors
As the risk of pension scams is growing, The Pensions Regulator is requesting that trustees, administrators, and providers pledge to protect members from pension scams. If not already done, it is important that you assess the processes you have in place to identify scams and ensure that improvements are made to minimise the risk of any potential scam from occurring. Work with all of your advisors to ensure that the risk to members is as minimal as possible.
Know the warning signs
It is important to know and understand the potential warning signs of a pension scam. Generally, Trustees have a responsibility to take steps to safeguard the assets of the Scheme and to prevent and detect fraud and other irregularities. We recommend that Trustees take any relevant training to ensure that they can spot the signals of a pension scam. As well as this, they should encourage their advisors to do the same, especially those in member facing roles (e.g. Scheme Administrators). A good start would be to complete the Trustee Toolkit online learning programme from The Pensions Regulator found here: Trustee ToolKit.
As mentioned above, this list features the key points we deem to be important. There are lots of things that Trustees can do to help protect members and mitigate the potential risks surrounding pension scams. If you would like further information, or believe we can help in any way, please get in touch with us at firstname.lastname@example.org and one of the team will be happy to help.