The Government is under pressure to rethink its stance on pension transfer checks amid concerns the current process could allow scams to slip through the net.
According to pension transfer specialist Origo,existing rules mean it cannot check whether schemes, providers or platforms are running liberation services or scams.
Origo cannot run checks on individuals transfers because it is not a pension administrator.
Origo managing director Paul Pettitt says: “The issue is that fraudsters are getting more sophisticated and we’re trying to keep them away form the transfer market as far as possible.
“At the moment, we do a lot of due diligence on schemes or providers who want to come over. But a lot of the regulation is built at picking up potential liberation problems at the individual transfer level. It seems eminently sensible that we should be able to do more at the scheme or platform or provider level to check if the scheme is a trustworthy party.”
Standard Life head of pensions strategy Jamie Jenkins says: “You want a trusted set of partners so you can deal with each other quickly, efficiently and safely – you don’t do that by checking each transfer each time. You do those checks at the outset on the relevant market participants, not at an individual level.”
He adds the issue will become more pressing once the Government’s pot-follows-member plans introduce automatic transfers of pension pots in 2016.
HMRC declined to comment.