UK - Amendments to the Pensions Bill will give the pensions regulator more power to crack down on the illegal "trust busting" of schemes.
Pensions minister Baroness Hollis of Heigham tabled nine amendments in a bid to curb the growing number of so-called “pension liberation” cases.
The regulator’s powers will include being able to implement a restraining order that can freeze all the assets in a bank account, even if only a proportion are from liberated pensions.
Hollis said the scams robbed members of up to 70% of their pension pots and had cost members more than £50m.
The organisers offer to convert members’ accrued rights into an immediate tax-free lump sum, luring people who urgently need cash.
They transfer the pension into a scheme in the name of a fictitious new employer without the trustees’ knowledge and charge members commission of up to 30% of their fund plus taxes of up to 40%.
Hollis said: “Pensions liberation poses a great risk to the security of scheme members’ benefits.
“It also serves to frustrate the purpose for which parliament has granted generous tax relief to approved pension schemes.
“That is why we believe that we should equip the pensions regulator with the necessary powers to act swiftly and decisively against the perpetrators and that is why we have introduced these new clauses.”
The amendments were widely supported in the Lords.
Baroness Turner of Camden said: “The government is to be congratulated on attempting to deal with that racket and attempting to protect the interests of very vulnerable people.”
The pensions advisory service, OPAS, agreed.
Chief executive Malcolm McLean said: “Anything that will allow the regulator to come to grips with this and provide greater protection to members’ benefits is very welcome.”
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