The Government has recently introduced some new pension transfer rules to help prevent people from becoming victims of pension scams.
Changes came into force on 30 November 2021 and give pension schemes new powers to refuse a request to transfer a pension to another pension scheme if there is a risk that it might be a scam. The changes remove an individual’s automatic right to a transfer and require pension schemes to complete several tasks to satisfy themselves that a member’s pension benefits are not at risk.
If you want to transfer your benefits on hold to another pension scheme, GMPF must now assess your request against two new conditions.
The first condition is that the receiving scheme needs to be either:
- a public service pension scheme,
- an authorised master trust, or
- an authorised, collective, defined contribution scheme
You can find a list of authorised master trusts on the Pension Regulators website under Master Trusts. If the pension scheme you want to transfer your pension to is not one of these, your request must meet the terms of the second condition, plus you will need to provide us with some other information.
The second condition is that GMPF must receive evidence or information that demonstrates an employment link for an occupational pension scheme or an employment link or a residency link for a qualifying recognised overseas pension scheme (QROPS). There may be some other requirements too. We will tell you what these are and what evidence you need to send us when you get in touch.
We always recommend that you seek impartial advice before deciding to transfer your benefits to another pension provider. Money Helper can provide free guidance on your financial situation and the retirement options available to you.
If the total transfer value of all your LGPS benefits is more than £30,000, you must, by law, seek independent financial advice. You must also provide us with proof you have taken this advice before we can transfer your benefits. Your advisor must be registered with the Financial Conduct Agency (FCA) to advise you about pension transfers.
To help protect yourself from falling victim to a scam, the Financial Conduct Authority and the Pensions Regulator suggest you follow these four steps:
- Reject unexpected offers
Pension cold calling is illegal, so be wary if someone contacts you out of the blue. - Check who you are dealing with
Search www.fca.org.uk/scamsmart to make sure anyone offering you advice is authorised and permitted to give pension advice. - Don’t be rushed or pressured
Take time to make all the checks you need, no matter how amazing the deal is. - Get impartial information or advice.
Consider using https://www.moneyhelper.org.uk for free independent and impartial advice.
You can read more about the transfer process and pension scams on our website.