UK - Administrators are urging schemes to tighten their security procedures amid fears lax controls could allow criminals to steal millions.
An administrator – who declined to be named – warned that as many as a fifth of all schemes could be vulnerable to theft.
The warning follows the discovery that a scheme worth over £500m sponsored by a large communications/media firm, could have lost up to £5m.
The administrator said any member of the scheme’s administrative staff could have “potentially” stolen millions, due to a lack of “basic” controls.
The administrator said: “From a security viewpoint schemes have to turn it round and say ‘these are the procedures, these are the loopholes, how can you bust it?’
“I, as an auditor, could have done it. Whether or not I’d be caught is a different matter.”
Watson Wyatt head of administration consulting Alan Course said he knew of similar cases and urged schemes to overhaul the security of their systems and to review their susceptibility to fraud.
He added: “Human nature being what it is, while there is no way you can eliminate all risk, it can still be significantly reduced.”
However, Linklaters pensions litigation partner Mark Blyth warned: “No matter what processes you put in place, it is difficult to safeguard against criminals.
“You could put endless controls in place, but it may not stop them from getting the money out of the door.
“It may alert you earlier to the problem, but by then the money will be gone.”
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