Business Continuity Planning for Covid-19. Learn more Logo link to homepage Search Manage your pension Menu toggle New and enhanced powers to protect members from pension scams Tuesday 09 November 2021 BLOG Following a consultation earlier this year, the Department for Work and Pensions (DWP) has now published regulations, effective from 30 November 2021, which will allow trustees and scheme administrators to block member transfers if they consider them to be suspicious due to ‘red flag’ signs of fraud, or methods used commonly by scammers. Using a new flagging system, schemes can prevent a transfer request if they apply a red flag, or pause a request under an amber flag until such time as the member proves he or she has taken specific scam advice from the Money and Pensions Service (Maps). In publishing the new regulations, the DWP took on board industry feedback from the initial consultation. Acknowledging ‘potential for misinterpretation’ that each condition would have to be considered and applied in sequence (which would slow down the transfer process), the DWP confirmed that it will remove each standalone condition and merge these into a single condition. The DWP also recognised ‘that there may be potential impacts on businesses due to delays in the transfer process’ and ‘welcome any evidence of these’ which they will consider when looking at updates to the regulations. Master trusts, collective defined contribution schemes and funded public sector schemes are considered safe destinations' and effectively exempt from the new measures. The new regulations will be reviewed within 18 months to ensure they are providing an effective barrier to fraudulent transfer activity. The Pensions Regulator (TPR) and The Pensions Ombudsman have welcomed the publication of the new regulations. To help provide support in ‘Dealing with transfer requests’, TPR has also published ‘guidance for trustees, pension managers and administrators on checking, proceeding with and refusing transfer requests from scheme members’ from 30 November 2021. Comment Most transfers will continue to be ‘business as usual’. In some cases, however, transfers will require extra due diligence, in particular transfers to occupational schemes or QROPs. Trustees and their administrators will need to update their procedures for this minority. To the extent that trustees and administrators rely on their ‘clean lists’, some thought will need to be given as to what criteria to use in determining which receiving arrangements are included on such lists. John Wilson LLB (HONS), FPMI, ACII Get In Touch Share this Share on LinkedIn Share on Twitter FURTHER READING Investing in future pension administrators BLOG by Troy Ramsey • 02 Dec 2021 Read more The road to buyout – an actuarial perspective BLOG by David Lucas • 26 Nov 2021 Read more Pandemic paves the road to DB buyout BLOG by Matthew Masters • 18 Nov 2021 Read more More Insights? All Insights OUR ACCREDITATIONS Any questions about our services? Please contact us and we will get back to you. Contact us View our LinkedIn profile Read our Tweets Watch our Videos Like us on Facebook Home Awards and accreditations Careers Resources Regulation COVID-19 Privacy Policy Cookie Policy © 2021 Spence & Partners Ltd. All Rights Reserved. Cookie Control Your choice regarding cookies on this site We use cookies to optimise site functionality and give you the best possible experience. I Accept I Do Not Accept Settings