From 30 November 2021, new regulations came into force to give trustees and scheme managers greater power (and greater responsibility) when processing transfers. The new regulations apply to all pension transfers, including those from personal pension plans.
As a result, trustees, providers and administrators are required to carry out new checks before a transfer takes place to determine whether the request meets the conditions to enable a statutory right to transfer, or whether any amber or red flags are identified. Failure to carry out the required due diligence could expose trustees or managers to potential liability should a transfer be allowed to take place to what turns out to be a scam arrangement.
These additional requirements give trustees and managers the power to pause or prevent a transfer request where any concerns are present:
- If there are any amber flags, the member must seek guidance from MoneyHelper before the transfer can be completed.
- If there are any red flags, the trustees or scheme manager have the power to refuse the transfer.