Select committee: Work and Pensions Committee
Recommendation 15
Fifth report: Protecting pension savers—five years on from the pension freedoms: Pension scams
Published 28 Mar 2021
Paragraph 62
Addressed to Department for Work and Pensions
Work and Pensions Committee Protecting pension savers – five years on from the pension freedoms: Pension scams All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
The regulations will identify potential indicators of a pension scam which would raise either red or amber flags. A red flag would allow a transfer to be blocked and an amber flag would allow a transfer to be paused until a person has received appropriate guidance. The red and amber flags being drawn up by the Department will need to strike a careful balance between protecting savers, being easily used by Protecting pension savers—five years on from the pension freedomss Pension scams 59 trustees and not being overly restrictive. We recommend that the suitability of the red and amber flags should form part of the 18 month review and then be reviewed at least every 3 years thereafter.
From: Work and Pensions Committee, Fifth report: Protecting pension savers—five years on from the pension freedoms: Pension scams (HC 648), paragraph 62, 28 March 2021
Government response
The government responded to the whole report on 6 July 2021 (deadline 28 May 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government "notes" the Committee's report, says it takes the recommendations "very seriously", and states it has "agreed with many of the recommendations from the outset" while it will "continue to look closely at the remaining recommendations".
- On the red and amber flag system for pension transfers, the Government agrees that the policy should be reviewed and that the flags' suitability forms part of that review, but "cannot" guarantee any legislative changes could be made "during this Parliament".
- It does not agree that inclusion on the FCA warning list should itself be a red flag, saying the Pension Schemes Act 2021 does not give powers "to use a third parties list or determination".
- It declines additional reporting by the City of London Police to Parliament on Action Fraud, saying it is "unnecessary" and oversight "should remain with the Government".
- The Government is "committed to publishing a comprehensive Fraud Action Plan after this year's Spending Review", but "cannot commit" to publishing details of its coordination with the Treasury.