Money

Pension liberation controls yet to have a significant effect warns Equiniti Paymaster

Mon 10 Mar 2014

Equiniti Paymaster has warned that pension liberation schemes are yet to have an effect.

Equiniti Paymaster, the administrator on behalf of 3 million pension scheme members, reports that in spite of a significant increase in regulatory pressure to clamp down on pension liberation schemes, the number of potentially fraudulent requests remains the same.

Equiniti Paymaster warns that its experience suggests that a typical large scheme may still be receiving around two or three requests per quarter which could be fraudulent.

As a result of the trend, Equiniti Paymaster is continuing to enhance its fraud prevention controls, including:
- training staff on what to look out for
- working with trustees to ensure that members are well informed through the use of effective communications 
- checking with members that they want to proceed 
- enhanced documentation gathering requirements 
- strengthened discharge forms for the member and receiving scheme to sign 
- process flows to help administrators identify potential liberation cases 
- checking with HMRC before a transfer is made, to ensure that the receiving scheme is still a Registered Scheme.

Paul Mead, Account Director, Equiniti Paymaster, commented; “The regulators must be commended for the work that they undertook in 2013 to counteract the wrongful operation of pension liberation schemes. This has been of benefit to trustees who can face conflicting duties in respect of their trust law and statutory duties. These pension liberation operations, have become increasingly sophisticated and are trying to veil their operations as legitimate. This is due to the fact that we, as gatekeepers, continue to advise schemes to be vigilant as the number of fraudulent cases has yet to show a significant decrease.”