20 April 2021
Pension scams ruin lives. They have a double financial penalty with practical and emotional consequences – the scam impacts on the victim’s income in later life but can also result in heavy tax charges which are imposed immediately.
The impact of Covid-19 on personal finances has strengthened the focus on pension scams – by the Pensions Regulator, The Pensions Advisory Service and the FCA – and has culminated in a new initiative to help protect members. Taking the form of a pledge, the Pensions Regulator is asking third party administrators to sign up to its six principles and then self-certify that they are taking action on a regular basis to minimise the impact of scams. This is something that LCP has already done.
The Pensions Regulator is also encouraging Trustees to become more closely involved in the day to day running of their schemes by asking them to sign up to the pledge. As part of their duty to look after the interests of their members, Trustees who delegate the administration of their scheme, should also familiarise themselves with the day to day work around the pledge. I recommend that trustees should:
- Ask their administrators about the processes and procedures they have in place to help protect members from scams - as well as how they signpost scams awareness in their communications to members.
- Ask their administrators whether they have signed up to the pledge as part of their commitment to protecting members and helping prevent pension scams, and, importantly, if they have self-certified that they follow the pledge’s principles.
- Ask their administrators whether they go beyond the pledge and follow the Pension Scams Industry Group’s code of practice.
- Look to complete The Pensions Regulator’s Trustee Toolkit module dedicated to scams as soon as possible.
- Add the topic to their next meeting agenda, noting which of the above actions still need completing.
In signing up to the Pension Regulator’s pledge and self-certifying that we meet all six steps, as well as having followed the PSIG’s code of practice for some years, I’m pleased to be able to give our clients and their members the reassurance that LCP’s comprehensive training, robust processes and member communications have been designed to help protect members from pension scams. This is just the latest step in helping members keep their benefits safe from the devastating and long-term effects, both emotional and financial, of pension scams fraudsters.