On 30 November 2021, the law on the transfer of pension benefits is changing.

From that date, trustees will have new obligations intended to help members avoid pension scams, and some members may find it difficult to transfer their pension benefits to the scheme of their choice as a result.

While I refer to ‘trustees’ in this blog, the changes apply to both occupational and personal pension schemes – so are applicable to scheme managers too.

What’s the current position?

Up until now, trustees who suspected a member might be falling victim to a pension scam found themselves in a tricky spot. If the member had a statutory right to transfer their pension benefits (as most do), the trustees risked breaching the law if they refused the member’s request. On the other hand, they faced criticism and complaint if they let the transfer go ahead and the member lost their retirement savings as a result.

What’s changing?

New regulations (the “Regulations”) make things easier for trustees by prohibiting them from agreeing to a statutory transfer request if there is credible evidence that the transfer could be part of a scam. The Regulations, along with accompanying guidance from the Pensions Regulator, set out the process that trustees must follow when dealing with a transfer request. This process alters how trustees should assess whether there is a risk of a scam.

The new regime

Members who want to transfer their pension benefits will need to provide trustees with certain basic information about themselves and the scheme they want to transfer to. This information should allow the trustees to determine whether the member’s transfer request falls under what is referred to in the Regulations as the First Condition or the Second Condition.

First Condition – This applies where the transfer is to a public service pension scheme, authorised master trust or collective DC scheme. If the trustees are satisfied beyond reasonable doubt that the First Condition is satisfied, they should not request any further information from the member and should allow the transfer to go ahead without further checks.

Second Condition - If the First Condition is not satisfied, the Second Condition will apply. This requires trustees to carry out further checks and they may need to request further information or evidence from the member.

The Regulations set out a list of red and amber “flags”. If an amber flag is identified by the trustees, the member must be referred to MoneyHelper and evidence that they have attended an appointment with an adviser before their transfer can proceed. If a red flag is identified, trustees must refuse the member’s transfer request.

If the member is trying to transfer to a qualifying recognised overseas pension scheme (QROPS) or occupational scheme, they will need to provide satisfactory evidence of overseas residence or an employment link with the new scheme (as appropriate) and a refusal to do so will constitute a red flag that means the trustees must refuse the transfer.


The Pensions Regulator’s accompanying guidance sets out its expectations of how the Regulations will be used in practice. Key points for trustees are:

  • The Pension Scams Industry Group’s Code of Good Practice can be used as an example of what good practice in this area looks like. The Code contains guidance, templates and other resources that will be useful to trustees and administrators adjusting to the new requirements of the Regulations.
  • Be alert to member vulnerability, and appreciate that some members may require greater support in order to avoid pension scams. Remember that vulnerability can take different forms.
  • While the Regulations apply to statutory transfer requests (as opposed to non-statutory transfer requests made in accordance with the scheme rules), trustees are encouraged to apply the same checks to non-statutory transfer requests.
  • Trustees should keep up to date with evolving scam tactics and bear in mind good industry practice at the time a transfer request is received.
  • Records should be kept of the trustees’ assessment, decision-making and communication with the member. This will be important if the member challenges the trustees’ decision and seeks to raise a complaint.
  • A member whose transfer request is refused should be provided with details of the scheme’s internal dispute resolution procedure (IDPR) in case the member wants to appeal the trustees’ decision.


The Regulations herald a new dawn in the fight against pension scams. Many in the industry have long campaigned for members’ statutory transfer rights to be restricted where there is evidence that a transfer may be part a pension scam, and have grown increasingly frustrated at how difficult it is for trustees to protect members. But there is no denying that the Regulations restrict the freedom given to members to exercise control over their pension savings. I for one welcome the Regulations, but I know there will be some who are questioning whether the balance between member autonomy and member protection has been struck correctly.

Need help?

There’s a lot to get to grips with here for trustees, and not much time in which to do it. We’re on hand to help, so let us know if you need advice or training to make sure you’re meeting the new requirements.