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Trustees lack confidence in new pension scam rules

Almost three quarters of trustees are not confident the new transfer rules will reduce pension scams in the long term, according to research.

The survey from Barnett Waddingham, which polled 101 trustees, found pessimism among trustees, with 25 per cent of respondents believing the new rules will have no impact at all.

The regulations, which came into force on November 30, empower trustees and scheme managers to prevent a transfer request when a ‘red flag’ is present; for example, if a scheme member requests a transfer after receiving unsolicited contact or has been offered an incentive to transfer.

In instances of any ‘amber flags’, such as investments that would normally only be offered to sophisticated investors, a member must obtain guidance from the government’s MoneyHelper service before the transfer may go ahead.

Barnett Waddingham found 76 per cent of trustees believe they are ready for the new rules. However, only 24 per cent of respondents said they have familiarised themselves with the changes since they came into force.

The consultancy stated that several weeks after the regulations took effect, “it is evident that there is a lack of consistency in knowledge and understanding across pension schemes and trustees,” since around one in five respondents stated they do not know where to start looking for relevant information.

Alongside this uncertainty, all trustees (100 per cent) said they were concerned about at least one obstacle to putting the new…

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