The Treasury is set to introduce tougher measures around transfers and setting up small self-administered schemes (SSAS) as part of a raft of measures designed to stop pension scams.
In its consultation response released today, the Treasury said it will go ahead with measures which limit the statutory right to transfer for members of pension schemes.
Under new proposals, people will only have the right to transfer their pension if it is moved into a personal pension scheme run by a regulated firm, an authorised master trust or when a link can be established between an employer the scheme being transferred into.
The Treasury will also extend the statutory right to transfer to include ‘legitimate QROPS’.
The consultation response noted 25 respondents said SSASs ‘were vulnerable to scams’ and suggested increasing the regulation of this market.
The Treasury said it acknowledged some SSASs are being registered with a dormant company. The majority of consultation responses said ‘there were few, or no, legitimate circumstances in which a dormant company might wish to register a new pension scheme’.
As a result the government said it plans to go ahead with a requirement to ensure all new pension schemes are registered through an active company. This will be applied to existing pension schemes registered to dormant sponsoring employers and will be legislated for in the Finance Bill in 2017.
25 respondents also called for the government to bring back the pensioner trustee requirement, but the Treasury did not agree this should be reintroduced as it said ‘members with relevant knowledge should be free to choose their own investments’.
As confirmed over the weekend, the government announced it was going ahead with the ban on pension cold calling which will be enforced by the Information Commissioner’s Office (ICO). The ban will also include texts and emails.
The ban will be subject to two exemptions; where consumers have requested information and where there is an existing relationship.
The government said it will work on the details of the ban ‘during the course of the year’ and then bring forward legislation ‘when parliamentary time allows’.
Royal London policy director Steve Webb said he was concerned the measure may not get rolled out till 2020.
‘With people being scammed every day, this is much too slow,’ he said. ‘Even if a measure is included in an act of parliament some time in 2018, there will then need to be more detailed “secondary” legislation drafted and debated. Unless the government makes this a priority we could still see cold-calling well into 2019 or 2020.’