The initiative includes clear guidance around appropriate due diligence and what best practice looks like for trustees and administrators, helping them to take appropriate action to safeguard and inform their members.
XPS research shows that there has been a significant increase in signs that members could fall victim to a scammer during the pandemic, with 6 in 10 cases reviewed in October 2020 raising concerns. In the past two years our investigations have discovered that unregulated advisors remain an issue, featuring in 20% of all cases. A further 94 transfers featured concerns about the receiving vehicle.
Colin Miller, Head of XPS Member Engagement Hub, said: “This initiative is a major step forward in the fight against pension scams. We have been tracking this activity through our Scam Protection Service for over five years and nearly two –thirds of all transfers are now raising red flags, a sign of potential scam activity.
“The only way to minimise the opportunities for scammers is for trustees to communicate directly with transferring members. Paper checks are no substitute for talking to your members and the pledge recognises this.”
The regulator’s pledge empowers trustees to do the right thing by members and proposes a number of commitments trustees can undertake to self–certify. These include:
• Communicating the risk of scams to members;
• Encouraging members interested in cashing in their pension savings to contact the Pensions Advisory Service for impartial guidance;
• Understanding the warning signs of a scam and best practice for transfers;
• Undertaking appropriate due diligence measures and documenting pension transfer procedures;
• Communicating concerns to members if high risk transfers must be paid; and
• Reporting any concerns about a scam to the authorities and communicating concerns to the member.
Helen Cavanagh, Client Lead for the XPS Member Engagement Hub said: “It will be important for trustees to work through the regulator’s checklist and confirm their advisers, administrators and the scheme have the necessary processes in place to meet the pledge. We hope that this becomes a reference point for good practice and will be watching with interest to see whether the Ombudsman uses the pledge in future cases.
“The regulator expects stringent processes to be put in place and if carefully designed and managed once implemented can make a substantial difference in protecting members. This is really good news for scheme members, who will be more protected as a result.”
|
