A ruling by The Pensions Ombudsman (TPO) could mean past victims get redress if it finds trustees failed to alert members to pension transfer risks or did not perform mandatory checks.
Last month, the Ombudsman issued a determination notice relating to a complaint made by a member of the Police Pension Scheme, who said the Northumbria Police Authority transferred his pension fund to a new pension scheme without having conducted adequate checks in relation to the receiving scheme, and failed to provide sufficient warning as required by The Pensions Regulator (TPR).
In the determination notice, the Ombudsman said the Northumbria Police Authority failed to provide the member with the official anti-scam literature prepared by TPR, and also failed to do proper checks on the scheme into which the money was being transferred.
The Northumbria Police Authority was found guilty of maladministration and was ordered to reinstate the member's accrued benefits in the scheme, or provide equivalent benefits, adjusting for any revaluation that has arisen since the transfer.
In addition, it was ordered to pay the member £1,000 to compensate for the distress and inconvenience they suffered as a result.
To avoid ‘double counting', the authority was entitled to recover the pension fund from the trustees of the new pension scheme.
The ruling highlights the important responsibilities schemes have towards their members, not only in alerting them to the risk of scams but also in performing proper checks on the receiving scheme, and offers new hope for victims of pension scams, according to Royal London director of policy Sir Steve Webb.
Webb said: "While 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," he continued. "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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