According to complaints filed with Action Fraud, more than £30 million has been lost to pension scammers since 2017. All types of pension pots are targeted, with some individual savers losing hundreds of thousands of pounds. Given the current cost of living crisis, more people might feel tempted to access their pension savings, making them more vulnerable to pension scams. This increases the onus on pension trustees to protect their members and has encouraged more trustee boards to make the Pledge.
The Pensions Regulator (TPR)’s Pledge to Combat Pension Scams (the Pledge), launched in November 2020, is an invitation for schemes to self-certify to TPR that they have put in place certain practices to protect members against scammers. Schemes can sign up to the pledge using an online form, which acts as confirmation that the scheme has implemented the pledge commitments.
117 pledges were made within a month of the campaign’s launch, mainly by institutions and administrators rather than trustees. However, we are now observing a growing appetite for signing the Pledge from amongst our trustee client base.
- Schemes must regularly warn members about the risk of scams by including scams materials in annual benefits statements, transfer packs when a transfer is requested and any member-facing communications such as the scheme’s website.
- Schemes must encourage members who ask for cash drawdown to contact Pension Wise for appropriate impartial guidance.
- Schemes must get to know the warning signs of a scam and good practice for transfers by making sure that trustees and anyone who interacts with members:
- Complete the scams module in the Trustee Toolkit
- Attend industry scams events and webinars
- Stay up to date with scams guidance from TPR and the Financial Conduct Authority (FCA), and reviews the Pension Scams Industry Group (PSIG) Code of Good Practice
- Schemes must report any concerns about a scam to the authorities and communicate this to the member by:
- Encouraging members to report the scam or suspected scam to Action Fraud, or call Police Scotland on 101 or Advice Direct Scotland on 0808 164 6000
- Directing members to the FCA website to report suspicions about a pension transfer
- Reporting any intelligence or concerns to TPR
The Benefits Of Signing Up
Committing to the Pledge shows that a scheme is looking out for its members in these difficult times and taking scam concerns seriously. Hundreds of other organisations have already signed up – joining them will demonstrate that the scheme in question is keeping up with its peers in the fight against scammers. TPR also provides specific training and support materials to assist schemes with maintaining compliance once they have signed up to the Pledge.
The only trade-off would seem to be the time commitment involved, given the competing pressures on trustee time.
Taking Things Further
If combatting pension scammers is a key focus for trustees, there is plenty more that schemes can do besides signing up to the Pledge.
TPR also asks schemes to consider becoming a member of the Pensions Scams Industry Forum (PSIF). This is a voluntary industry group that meets on a monthly basis to discuss pension scams threats and trends, and applications for membership can be made online. There is also the Pension Scams Industry Group Code, which is more comprehensive than the Pledge and contains a Code of Best Practice.