TISA welcomes broadening of streamlined pension transfer route but calls for more robust reputability test
PRESS RELEASE
The Investing and Saving Alliance
For Immediate Release
Contact: David Beer
TISA welcomes broadening of streamlined pension transfer route but calls for more robust reputability test
TISA has welcomed proposals to widen the range of pension transfers able to proceed through the streamlined Condition 1 route but has warned that the proposed test for determining whether a receiving scheme is “reputable” must be clearer and more robust.
In its response to the DWP consultation on amending pension transfer regulations, TISA called for strong guidance, referenced in legislation, to prevent schemes interpreting the “reputable” threshold differently. Where a receiving scheme is known to be genuine, TISA said the transfer should proceed through Condition 1 and all other flags should be removed.
TISA also stressed that regulators – not ceding schemes – should be responsible for judging whether a receiving scheme is operating legitimately and appropriately.
Renny Biggins, Head of Policy: Products & Long-Term Savings at TISA, commented:
“We welcome the intention behind these reforms to make legitimate pension transfers safer and more efficient. However, that objective will be undermined if the proposed ‘reputable’ threshold is left open to interpretation. Different ceding schemes could reach different conclusions about the same receiving scheme, recreating the inconsistency and delay the changes are intended to address. More robust guidance is required to help ensure consistent outcomes.
Secondly, while ceding schemes have an important role in protecting members from scams, they should not be expected to assess the wider merits of other providers. That is the responsibility of the regulators. Once a scheme has been established as genuine, the transfer should proceed without further flags creating unnecessary friction.”
TISA also warned that the proposed approach to Small Self-Administered Schemes (SSASs) is not appropriate, as many genuine and long-established SSASs continue to operate after their original employer link has ended.
TISA has instead called for the reintroduction of pensioneer trustees to provide professional oversight, help raise administration standards, support member trustees in meeting their responsibilities and reduce the risk of regulations being breached inadvertently.
Biggins added:
“An employment link is a poor proxy for whether a SSAS is genuine, particularly where an established scheme has simply outlived the business that created it. Requiring professional trustee oversight instead would target the real risk more effectively by strengthening governance and reducing avoidable compliance failures.”
ENDS.
Notes to editors
- A full copy of TISA’s response is available on request.
- DWP’s consultation Protecting Pension Savers – Proposals to Amend the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 can be found here.
- Condition 1 is the statutory route under the Pensions Schemes Act 2021 that allows transfers to specified types of receiving scheme to proceed without the additional red and amber flag checks required under Condition 2. DWP has proposed broadening it so that transfers may also proceed where trustees or managers are satisfied, on the balance of probabilities, that the receiving scheme is “reputable”.
- TISA is a not-for-profit membership organisation committed to improving the financial wellbeing of all UK consumers by working collectively with the financial services industry to deliver solutions and champion innovation, for the benefit of people, our industry, and the nation.
- TISA has approximately 260 member firms involved in the supply and distribution of savings and investment products and associated services. Members include the UK’s major investment managers, retail banks, online platforms, insurance companies, pension providers, distributors, building societies, wealth managers, third party administrators, FinTechs, financial consultants, financial advisers, industry infrastructure providers and stockbrokers.