Pensions - Articles - Legal ruling opens floodgates for pension liberation scams

 Schemes will now find it extremely difficult to prevent pension transfers to any registered pension scheme - regardless of whether they think it is a potential scam.

 In the case of Hughes v Royal London* the High Court has effectively overruled the Pensions Ombudsman’s determination to give pension administrators the ability to block transfers in certain circumstances without fear of future sanction.

 As a result it has potentially made it easier for unwary pension members to fall prey to criminal pension scammers.

 Peter Scott, head of pension regulation and compliance, Equiniti Pension Solutions: “This decision to overrule the Pension Ombudsman has come as a major blow to pension schemes and their administrators, many of which had restructured their anti-scamming processes in the light of the Pensions Ombudsman’s determination.

 “In our view, the High Court’s decision has deprived the industry of a valuable tool in the fight against pension scamming and has further stretched the meaning of an occupational pension scheme. Not for the first time, we have to ask ourselves if the only way to bring an effective end to the pension scamming phenomenon is for fundamental changes to be made to the legislation underlying the transfer process.”