Transfer scam regulations have done what they set out to achieve but have “banished to the bin” common sense and good customer outcomes, according to some industry commentators.
The scam pension transfer regulations introduced in November 2021 have met their primary goal in that fewer people have been made transfers to schemes where their pension was at risk, but more were left cursing the delays caused.
The regulations gave pension trustees and scheme managers the power to halt a transfer, if they deem it necessary, by raising a ‘red flag’.
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In addition, they can raise an ‘amber flag’ if they suspect a potential scam, which will mean the member will have to provide evidence they have taken specific scam guidance from the Money & Pensions Service before they are allowed to transfer.
But these rules are causing delays.
This is because an amber flag is raised where the trustees of the transferring scheme decides there are overseas investments included in the receiving scheme.
But given most schemes include overseas investments, a large number of pension savers were required to take scams specific guidance from Maps before the transfer proceeds.
Martin Tilley, director at Westbridge Ssas, said: “Despite the Pensions Scams Industry Group’s estimate that 5 per cent of all transfers might give cause for…
