Ombudsman: pension liberation reports expected in a 'few weeks'

The ombudsman told Pensions Expert in November they were investigating 17 cases, with determinations expected in the new year. However, in February it said the initial determinations were likely to be due in April or May.

[The industry is] awaiting ombudsman decisions which will hopefully give a bit more clarity as to what the expectations of the ombudsman are

Ben Fairhead, Pinsent Masons

In June, another update was issued that stated the cases were “taking longer than hoped, and although we are nearing decisions on them, it is unlikely they will be published before July”.

The ombudsman Tony King has now told Pensions Expert progress is being made on the approximately 80 liberation cases and expects the determinations to be be published in the next few weeks.

He added: "The hope is that once we’ve published some decisions it will become clearer for trustees and pension providers generally what their obligations are, when they are put in the difficult position of having to decide whether to allow a member to transfer or not.”

Potential pension liberation scams have put trustees and administrators in a difficult position when they receive a transfer request, as they are obligated to make the transfer within six months or face penalties.

Ben Fairhead, senior associate at law firm Pinsent Masons, said: “[The industry is] awaiting ombudsman decisions which will hopefully give a bit more clarity as to what the expectations of the ombudsman are.” He added caution and wariness of such schemes on the part of trustees remains important.

Steve Hyndman, head of financial crime at Phoenix Group, said when there is a potential scam involved in a transfer request, trustees have the ultimate responsibility for trust-based schemes, although they will get support from their administrators.

"For non-trust-based schemes, responsibility will fall to the administrators,” he said. Trustees are being told to protect themselves by ensuring scheme members are aware of the risks of pension scams and that they receive a scorpion-branded campaign leaflet from the Pensions Regulator.

Andrew Warwick-Thompson, executive director for defined contribution, governance and administration at the regulator, said trustees should be completing due diligence on the receiving scheme.

Trustees were also warned to explain potential delays while they investigate the legitimacy of the scheme. One area of suspicion could be when a scheme puts pressure on members to transfer quickly. But it is clear trustees have a tricky decision to make.

“Trustees are under legal obligation to pay the transfer,” he said. “Most people who [request] transfers do so for perfectly legitimate reasons.”

To tackle pension liberation scams, the regulator introduced its scorpion campaign in 2013. Last year, the campaign focused on educating trustees and administrators about the signs of pension liberation scams.

This year, with rebranding, the campaign is focused on consumers. Pension providers have been urged to include the scorpion campaign leaflet in annual reports to members, as well as to any who request a transfer.

To deter pension liberation and assist trustees and administrators in the transfer process, HM Revenue & Customs’ registration procedure for pension schemes has changed to make the process more robust, and now allows administrators to check more easily whether a scheme is registered when a member requests a transfer.

The Pension Liberation Industry Group is also putting together a code of practice that is expected later this year, which will give more guidance for the industry.