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Pension scam ruling puts focus back on scheme duties

A ruling from The Pensions Ombudsman has turned the focus back on schemes and employers over what responsibilities they should bear when savers are scammed.

While TPO rulings cannot set precendent, and are decided based on what is fair and reasonable by the particular adjudicator, a judgment in a case involving a police officer who transferred his police pension into a scheme where it “may have been lsot or misappropriated”, has found that Northumbria Police Authority made several failings in the case.

These included failing to send anti-scam literature to the office, but also neglecting to carry out robust checks on where the money would end up after transfer.

The occupational scheme that was set to be the receiver of funds was based in London, not Northumberland, and was a relatively new arrangement.

These should have been red flags, the TPO ruled, finding the police scheme should put the officer back to the pension he would have had because of the maladministration.

Royal London policy director Steve Webb says: “Whilst individuals obviously have a responsibility to take good care of their pensions and to take proper advice, this ruling shows that pension schemes also have important duties to protect members. Not only should they flag the risk of scams, but they should also be undertaking thorough checks about where the money is going to be transferred to.”

“It might be the case that some past victims of scams who have complained to a pension scheme and been turned away could still get redress if the Ombudsman thinks that their scheme trustees did not do a proper job in protecting them.”

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