The chief executive of The Pensions Regulator (TPR) Lesley Titcomb has written to the trade body for small self-administered schemes (SSAS) in a bid to calm a furore in the industry, after a TPR blog suggested a ban on new SSAS schemes.
Last month TPR executive director Andrew Warwick-Thompson created alarm and criticism from the SSAS industry, and wider pension community, for a blog post titled Helping trustees stop scams – why we need a ‘safe scheme list’ and a SSAS transfer ban, which said there should be a ban on setting up new SSAS schemes and transferring to existing ones.
Warwick-Thompson said SSAS has become the ‘vehicle of choice for criminals setting up a scam’.
He wrote: 'So, I believe that pension transfers to SSAS arrangements ought to be banned. In fact, to put a stop to their abuse, I believe that an outright ban on the establishment of any more SSAS arrangements also warrants serious consideration.'
Following the comments many were quick to criticise Warwick-Thompson and SSAS firms became alarmed that their entire sector could be closed down by the regulator.
In response to the blog, the Association of Member Directed Pensions Schemes (Amps), the trade body for the Sipp and SSAS sector, submitted a request to meet Warwick-Thompson to discuss the article – a request which he did not respond to.
Following this Amps chairman Zachary Gallagher has written to TPR board, expressing the industry’s ‘deepest concern’ at the blog.
In the letter, seen by New Model Adviser®, Gallagher invited TPR to say whether or not the blog was ‘encouraged or supported by the board’.
‘Our association would be very disturbed to learn of any intention of TPR to consider or give effect to the proposals postulated by Warwick-Thompson,’ the letter said.
Gallagher added that Amps does not agree with the statement SSAS ‘has become the “vehicle of choice” for pension scams’, and said the attack on this pension model could be seen ‘as admission of failure in the fight against pension scams’.
He also said the fact the blog came from TPR’s executive chairman meant it carried considerable meaning for the sector.
‘Self-publicised opinion is common commodity in the internet age; any industry should expect critical commentary. When the source of that criticism is a very senior figure at a statutory body charged with regulating products of that industry, the words are rather harder to ignore, and carry greater significance, than those of the typical observer. We hope that a serious regulator would not encourage a free form “blogging” approach to regulation,’ he said.
In response to Gallagher’s letter, TPR chief executive Titcomb wrote back in an effort to calm his fears.
Titcomb said the blog had been ‘simplified in some subsequent media coverage’ and ignored some of the other points Warwick-Thompson made.
She added TPR is eager to be transparent and ‘to express our views more publicly across different channels, such as blogs’.
These blogs, she said, aim to create debate and to express views to stakeholders.
Titcomb (pictured) said the post did in fact not suggest a ban on SSAS but ‘instead shifting the balance of proof to the member and receiving scheme administrator to convince the trustees of the ceding scheme that a discretionary transfer is safe’.
She also offered a meeting with Amps and Warwick-Thompson.
In reaction to the letter, Gallagher said he is pleased TPR wants to engage with Amps and said he was happy with the overall tone of the response.
‘The letter suggests to us that Warwick-Thompson's rather extreme proposals in regard to SSAS do not reflect the broader view of TPR; we will be glad to hear this confirmed at a meeting with them,’ he said.
Richard Mattison, director at SSAS provider Whitehall Group, said he was pleased to see Amps’ letter to TPR and suggested Titcomb’s response suggested there was a lack of proper planning at the regulator.
‘[The letter from Titcomb] was saying these blogs are another form of communication and stimulating debate and it seems to imply they didn’t know Warwick-Thompson was going to say these things and it has caught them out.’
Mattison however said he was still concerned by the way the regulator views SSAS.