The DWP and the Pension Regulator have issued a joint statement and amended guidance on transfer regulations introduced in November 2021.
The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 which were introduced in November last year give providers the right to refer the customer for guidance or even refuse a transfer if there are clear red flags. Although the vast majority of transfers should still go through with no issue, there have been industry concerns that the new regulations could delay the transfer process. Examples given include if there are overseas investments or if an incentive is deemed to have been given to transfer.
In the joint statement issued by DWP and the Pension Regulator on Tuesday (5th July), clarification was made that the new legislation “should have no impact on the process for transfers that, prior to the introduction of the regulations, would have caused no concern”.
The Pension Regulator has since provided updated guidance on dealing with transfer requests.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown commented:
“We welcome DWP and the Pension Regulator’s joint statement and amended guidance on transfer regulations. This regulation is intended to give pension providers greater power to protect people’s life savings from scammers and as long as the provider’s pension scheme rules allow, it shouldn’t add any extra red tape where a genuine transfer request is made.
The statement is clear the regulations should not impose ‘additional burdens on schemes and administrators’ and that most transfers should continue to go through without concern as long as the provider has robust due diligence processes in place.
Those providers whose rules do not enable them to make discretionary transfers may be able to update them.”