How to solve a problem like Pension Fraud – Employee Benefits


To quote the Department of Work and Pensions, “Pension fraud is a threat”. Until now, the hands of the trustees were tied when a member had a legal right to transfer their services and even in cases where the assumption was fraudulent they were obliged to transfer them.

The regulation, introduced on November 8, empowers trustees for the first time to respond to their concerns and, under certain circumstances, to reject a statutory transfer.

Trustees must confirm that one of two new conditions has been met before they can make a legal transfer. The conditions and the accompanying controls are designed to reveal the most common indicators of pension fraud. The pension regulator’s regulations and accompanying guidance detail the additional steps trustees and administrators must take.

Taking steps to protect members’ benefits and crush the scammers is certainly a good move, but time is of the essence for trustees and administrators to look into the new requirements and add them to existing ones by November 30th Integrate transfer processes.

It is expected that referral requests will be processed with minimal intervention in most cases and that further reviews will only be required in a small minority of cases. That being said, trustees must manage members’ expectations regarding the transfer process and keep them informed of the status of their transfer request.

It remains to be seen how the new requirements will play out over time and whether they will successfully prevent the transition to fraudulent agreements. The UK government has committed to reviewing the regulations within 18 months to ensure they remain effective in fighting the evolving methods of fraudsters.

Kirsty Pake is a senior associate with Sackers law firm

Source link


Comments are closed.