Joint statement updating transfer guidance from DWP and Pensions Regulator

On July 5, 2022, the DWP and the Regulator published a joint statement commenting on the operation of the Occupational Pension Schemes (Conditions on Transfers) Regulations 2021 since they came into force in November 2021.

 

The Regulations, which were intended to help prevent scam practices,  imposed on trustees certain conditions to be satisfied before a member could exercise their statutory transfer rights. The unintended consequence was that the Regulations actually became something of an obstacle to transfers which were at low risk of scams, and they had begun to affect standard transfers of a type that had caused no concern before the Regulations were implemented.

 

The statement reminds trustees to take a risk-based approach to decision-making around transfers. It also refers to the Regulator’s related guidance, which was updated on July 5, 2022, to address trustees’ concerns that the regulations applied where overseas investments or minor incentives featured in the transfer. The updated guidance now provides that if there is no statutory transfer right under the Regulations and the transfer is at low risk of a scam, the trustees may proceed on a non-statutory transfer basis under the scheme rules.

 

The DWP is to keep the Regulations under review, with a report due by April 2023.