B&CE has hit back at claims that some providers are using anti-scam rules introduced last year to delay or block transfers to other providers.
Yesterday, PensionBee said a number of pension providers were taking advantage of the new rules - adding additional steps to hinder the transfer process, consequently causing genuine pension transfers to be delayed or blocked.
However, the provider of The People's Pension hit back against the comments, saying that The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 required trustees to assess each transfer and to raise ‘red' and ‘amber flags' during the transfer process.
It said one such flag was the presence of an incentive in the transfer - something that B&CE said could include a wide range of structures, including some of the marketing incentives offered by providers such as PensionBee.
It added that any transfer which has been incentivised could not proceed as a statutory transfer.
A B&CE spokesperson said: "Our lawyers have instructed that some of PensionBee's marketing initiatives fall outside of the new regulations. The regulations broad reference to ‘incentives' means that any transfer which has been incentivised cannot proceed as a statutory transfer.
"We believe we are one of a number of providers to receive advice similar to this, and while we appreciate that the legislation may not match the policy intent, our trustee must apply the law as it stands."
The spokesman added: "We have been in contact with PensionBee to find a way forward in the best interest of our members who wish to transfer, and we have taken a number of steps to explore alternatives. The additional checks we are having to undertake in no way prevent our members from transferring their funds."
PensionBee strongly disagreed that the regulations prevented incentives of the kind it offers.
Chief executive Romi Savova responded: "On several occasions, the Department for Work and Pensions has clarified the intention of this legislation. The pension minister even set out the definition of an incentive as a 'too good to be true offer' such as free pension reviews or early access to pension cash.
"From this guidance and subsequent communication, it is clear that commonly used referral-like programs, which are offered by many of the largest pension providers in the country, are not a cause for concern or sufficient reason to delay consumers from moving their own money."
Savova added: "Pension providers have a duty to treat their customers fairly, yet a handful of actors appear to have taken the opportunity to misuse recent legislation rather than create products that make their customers want to stay. These also happen to be the same providers who often refuse to use electronic pension transfers and have appalling pension transfer times."
