“As a scheme administrator we have a duty to look for any warning signs that your pension is being transferred as part of a pension scam. This could be a transfer to an arrangement that allows benefits to be paid out before age 55 (the earliest age at which benefits can normally be accessed), or promises to pay out a tax-free lump sum that is greater than HM Revenue & Customs allow after age 55. Some companies are promising savers that they can cash in their pension benefits early by transferring their pension savings to them. However, their information can be misleading and this is when it turns into fraud. They are often not telling savers about the huge tax charges and the costs in terms of fees. Such a transfer could leave you with a tax bill of more than your pension. We don’t know if this is the case here and so as part of our standard due diligence checking process we need to ask you to please provide the following additional information in relation to the proposed transfer.”
If we have concerns with the member’s responses to the Member Questionnaire, we have a ‘Member Supplementary Questionnaire’, which we issue to the member for completion.
What is the EQ Pension Scamming Checklist?
Should a member confirm they wish to elect to transfer their benefits to an alternative arrangement, we complete a comprehensive ‘Pension Scamming Checklist’. This checklist is completed in addition to our normal transfer procedure and prompts the administrator through a number of stages or checks, including:
- Registered status of receiving scheme;
- Evidence of registered status;
- Establish statutory right to transfer;
- Pension scamming signs;
- Refer the case to the client for consideration (if the information provided suggests the member does not have a statutory right to transfer); and
- Report the matter to Action Fraud – the report, if necessary, is made by EQ’s Regulatory and Pension Support team.
We believe our process is comprehensive, with robust controls which act to warn members of the risks of pension scams. Where there is a statutory right to transfer it is ultimately the member’s decision on whether to proceed with transferring out, but we assist them by sharing details of any warning signs and risks identified, ensuring they are informed to make the right decision for their circumstance.
Quick links for furthur information
Please see below a list of sources which you may find useful in relation to detecting and pre-empting scamming attempts:
We recommend you continue to make members aware of the risk of scamming and the resources available to help avoid this risk.