The ABI is pressing the Government ahead of next week’s emergency Budget to strengthen the powers of providers to reject transfers to suspected pension liberation schemes.
Under present rules members have a statutory right to a transfer within six months of making a request.
A number of providers have seen cases where they have blocked transfers taken to the Pensions Ombudsman, but ABI director-general Huw Evans says a series of rulings have failed to provide sufficient clarity on the issue.
Evans says: “Everyone is concerned about fraud because there is obviously a much bigger opportunity for scammers than there was
under the old system.
“The law could be strengthened further to allow providers to reject – without any equivocation or comeback – a transfer request which they believe to be fraudulent. We need absolute legal clarity that, if in doubt, providers can reject a transfer.”
Evans also considers calls from consumer groups for the creation of a state-backed drawdown provider similar to Nest are “premature”.
He says: “The market is only just starting to develop and we should see what it can deliver before looking at Government interventions that create Quangos that could distort the market.
“We have one of the most competitive and effective long-term savings markets in the world and so it seems odd to suggest there is the need for some sort of state intervention.”