The Pensions Regulator’s Pledge campaign to combat pension scams

21 January 2021

The campaign

On 10 November 2020, The Pensions Regulator (TPR) launched its latest anti-pension scamming campaign when it called on the pensions industry to publicly pledge to combat pension scams. The campaign is supported by the Pension Scams Industry Group (PSIG).

At the time of the launch, Nicola Parish, TPR Executive Director of Frontline Regulation, said:

"Pension scams devastate lives. As the first line of defence for savers, trustees and pension providers have a vital role to play in beating the people behind these despicable crimes.  Scammers are targeting pension pots big and small and so I call on the industry to do its bit and make the pledge to help prevent people losing a lifetime of savings."

Minister for Pensions and Financial Inclusion, Guy Opperman, gave his support to the campaign and encouraged all pension providers, trustees and administrators to make the pledge and help do their bit to crack down on pension scams. The Financial Conduct Authority (FCA) also urged the industry to do its part in helping savers to be ScamSmart by signing up to the pledge.

EQ Paymaster wholeheartedly supports the pledge campaign and has signed up to it.

What does it mean?

Those that make the pledge commit to the following saver-protecting actions: 

• Regularly warning members about pension scams;
• Encouraging members asking for cash drawdown to get impartial guidance from The Pensions Advisory Service;
• Getting to know the warning signs of a scam and best practice for transfers by:
  • completing the scams module in the Trustee Toolkit and encouraging all relevant staff or trustees to do so;
  • studying and using the resources on the FCA ScamSmart website, TPR’s own scams information, and the PSIG code of practice;
  • considering becoming a member of the Pension Scams Industry Forum (EQ Paymaster is already a member);
• taking appropriate due diligence measures by carrying out checks on pension transfers and documenting pension transfer procedures;
• clearly warning members if they insist on high-risk transfers being paid; and
• reporting concerns about a scam to the authorities and communicate this to the scheme member.

Trustees, advisers and providers can sign up to the pledge through the TPR website. Pledgers can go on to self-certify they have met the six pledge steps outlined above.

In the first month of the campaign, over 100 pledges had been made, with 37 of those going on to self-certify that they have adopted stringent practices on due diligence, member warnings and reporting scams demanded by the pledge campaign.

Self-certification

TPR’s website provides the detail of the practices that ‘pledgers’ must have in place in order to meet the requirements of the pledge. These relate to the six pledge steps above; some examples of the kind of practices that TPR are looking to see in place are as follows:

• Communicating the risks of scams to members - regularly warning members about the risk of scams by including scams materials in:
  • annual benefits statements
  • transfer packs
  • external communication (such as scheme websites);
• Warning signs and best practice for transfers - attending industry scams events and webinars and staying up to date with scams guidance from TPR, the FCA and PSIG;
• Due diligence on pension transfers – taking appropriate due diligence measures and documenting transfer procedures. Examples of the sort of measures outlined by TPR are:
  • checking the FCA warning list where there is any concern about a transfer;
  • monitoring the number of cash equivalent transfer value quotes and which advisers are supporting the members’ requests;
  • calling members as part of the due diligence process when initial analysis has raised concern to assess the level of risk and to understand:
    • the nature of the member contact, e.g. by ‘cold call’, or whether there have been offers of a ‘free pension review’ or ‘early access’; and
    • if unregulated introducers and individuals of concern have been involved;
• Communicating concerns about high-risk transfers - clearly warning members who insist on high-risk transfers being paid by writing and calling to make them aware of your concerns;
• Reporting concerns about scams to the authorities - reporting any concerns about a scam to the authorities and communicating this to the member by:
  • encouraging members to report the scam or suspected scam to Action Fraud or 101 in Scotland;
  • directing members to the FCA’s website to report suspicions about a pension transfer; and
  • reporting any intelligence or concerns to TPR.

We are currently in the process of reviewing our transfer procedures in order to identify any additional practices we need to put in place in order to enable us to self-certify. Whilst many are already part of our existing procedures, there are some new elements, such as including scam materials with annual benefit statements and staff completing the scams module in the Trustee Toolkit, which we will need to incorporate.

What next?

Having committed to the pledge, and at the same time as reviewing our procedures, we are waiting to hear from TPR as regards the next steps that we will have to take. We will keep you informed of our progress via our client updates but if you have any questions regarding pension scamming and/or our transfer processes, please contact us.

From the Team at Equiniti