Scam protection – taking the Pensions Regulator’s pledge
At a glance
The Pensions Regulator (TPR) has launched an initiative asking trustees, providers and administrators to pledge to take all possible actions to protect members from scams
The pledge sets out the minimum steps pension schemes can take to protect members from scams
For employers, since transfer options are often used as a risk and cost reduction measure, it is important to make sure they can be offered safely to members without the risk of scams
This not only minimises the risk of a member losing their savings but also reduces the risk of a scheme having to reinstate poorly advised members
There are a variety of ‘red flag’ warning signs that may be present and speaking directly to members who wish to transfer is the best way to pick up on these – the pledge recognises this
What red flags are being seen?
Out of 45 warning signs that XPS look for, issues relating to fees and advice related concerns account for over 80% of red flags raised.
Incidence of ‘red flags’ is increasing
Proportion of transfers covered by our protection service with at least one red flag
Actions employers can take
- Check whether your trustees have signed up to TPR’s pledge.
- Make sure your scheme uses a scam protection service which involves speaking to members, rather than just a paper based approach.
- Work through the XPS’ pledge checklist to help you review and improve the processes your trustees have in place to identify scams and engage with members, in order to be able to meet the pledge.
What we have learnt from our experience
In the 5 years our Scam Protection Services has been running we have been involved in 4,500 transfers representing £1 billion of pension pots. This allows us to track, analyse and respond to developments in scam activity.
For more information on our XPS Scam Protection Service click here.
For further information, please get in touch with Vicky Mullins or speak to your usual XPS Pensions contact.