Transfer Due Diligence : Pension Scams

Pension scams continue to be a problem for the pensions industry and in November 2021 regulations were passed requiring trustees and scheme managers to perform specific checks before complying with a client’s request to transfer their pension. These regulations give providers powers to refuse a transfer, or ask the client to seek guidance, if specific risks are identified.

For pension transfers to Transact, the ceding scheme will be conducting these checks, and for pension transfers away from Transact, we will conduct these checks.

We have produced a User Guide providing full details of the checks we have to conduct for pension transfer-out requests before they can proceed, and how they can impact your clients. There is also an explanation of instances when clients will be referred to MoneyHelper for pension ‘safe-guarding’ guidance.

Please note, these checks can cause delays to the transfer, particularly if the trustee or scheme manager is unable to obtain the required information from the client in a timely manner. Therefore, it would be helpful to give your clients advance notice, so they can expect a call or email from the scheme manager as part of their due diligence process, and that they should respond as soon as they are able to.

For most transfers, we will contact the client to establish whether there are any specific ‘red flags’ that would prevent a transfer from proceeding.  If there are no red flags and the scheme is on our ‘clean list’, the transfer will proceed.

If the scheme is not on our clean list, we may need to contact the administrator or the client to establish whether there are any ‘amber flags’, such as the availability of high risk or unregulated investments. If any amber flags are identified, the client will be referred to MoneyHelper for pension ‘safe-guarding’ guidance and the transfer will not proceed until the client has confirmed their attendance and provided us with the reference number for the session. Where a MoneyHelper referral is required, it may be several weeks before an appointment is available.

If you would like more information, please contact your Adviser Support Manager.

1. Introduction
2. Transact Online (TOL) – Recent Enhancements
3. Transfer Due Diligence Pension Scams
4. Consumer Duty Actions
5. Over 54% of Investor Clients have Logged in in the Last year
6. Share Class Conversion
7. Transact- BlackRock MPS Update
8. Dealing with Pension Income Payments in Times of Uncertainty
9. Fund Changes
10. Interest on Cash Deposits
11. Transact Events 2023