Pension Scams
Millions of people fall victim to pension scams every year. Anyone can be the victim of a pension scam, no matter how financially savvy they think they are. People may be tricked into handing over their entire pension savings to scammers.
It’s important that everyone can spot the warning signs. The tactics used by pension scammers to encourage people to transfer their pension savings to them are constantly changing. Some of the tactics include:
- offering free pension reviews or health checks
- promises of better returns on savings
- unlocking pensions before age 55, tax loopholes, pension loans or upfront cash
- time limited offers or forcing you into a quick decision; using couriers to send documents, who wait until they are signed
- contact out of the blue – cold calling about pensions is against the law. A member should not be contacted by any company about your pension unless they have asked them to make contact.
Once a transfer has taken place into a scam it’s too late. A member could end up losing all of their pension savings. In some cases, they may also face a tax bill of 55% of the value of the pension transferred.
Our Pledge to Combat Pension Scams
The Fund have pledged to do what we can to protect scheme members and follow the principles of the Pension Scams Industry Group (PSIG)
Code of Good Practice
in so far as it applies to LGPS Funds.
Pledging to combat pension scams confirms our intent to protect our members and demonstrates that the Fund are committed to stopping scammers in their tracks.
We commit to:
- Regularly warn members about pension scams
- Encourage members asking for cash drawdown to get impartial guidance from
MoneyHelper
,
- Get to know the warning signs of a scam and best practice for transfers by key staff completing the scams module in the Trustee Toolkit
- Key staff keep up to date with industry changes by studying and using
Financial Conduct Authority (FCA
,
resources on the ScamSmart website
,
TPR scams information
and
the PSIG code
- Take appropriate due diligence measures by carrying out checks on pension transfers and documenting pension transfer procedures
- Clearly warning members if they insist on high-risk transfers being paid
- Report concerns to the relevant authorities and communicate and encourage members to report suspected scams