New reporting requirements for trustees to prevent pension scams

The version 2.2 of the code, published on Thursday, now includes the latest Pensions Ombudsman determinations and other legal developments, providing additional insights and examples of determinations in relation to specific patterns.

There are also several new calls to action for trustees, such as the recommendation to use telephone calls to better engage with the member during the pension transfer diligence process.

There should be a final telephone call with the member before any transfer payment is made when sufficient concerns of pension scamming have been identified. 

All transfers of concern should be reported — not only the ones that have been refused — and these reports should be made to a number of different agencies as required.

Appropriate management information should be developed and maintained by schemes. This should include details of transfers that have been refused, cancelled by the member when concerns have been raised with them and transfers paid under discharge at the insistence of the member. 

In 2019, the Pensions Regulator was the target of more than 343,000 email attacks, an increase of 148 per cent over the previous year, according to think tank Parliament Street.

The code stated that trustees have regulatory and other general responsibilities to act with due care and in the best interests of their scheme’s members, who could risk losing their pension savings through scams.

Margaret Snowdon, PSIG’s chair, noted that this version of the code “brings scams prevention and development up to date”. 

She added: “Alongside the new code, we include a summary of changes since the last version in June 2019, so that readers can clearly see how the world of scams is evolving.”

Matthew Swynnerton, a partner in the pensions team at DLA Piper and a PSIG member, noted that the updated code “streamlines the existing guidance in this complex and fast-changing area, and we trust will serve as an invaluable tool for practitioners and trustees alike”.  

He said: “The guidance provided by the updated code goes hand in hand with new protections afforded by the new Pension Schemes Act 2021, under which it is anticipated that additional statutory transfer right restrictions will be introduced later this year to give trustees greater power to prevent transfers to suspected scam vehicles.”

Snowdon revealed that the industry group expects “to produce a further update later in the year when regulations supporting the Pension Schemes Act 2021” come into effect.