The government has proposed a wide-ranging ban to prevent pension scams. The consultation listed the sorts of phone conversations that the government intends to fall within the scope of the ban. These included:

• offers of a ‘free pension review’, or other free financial advice or guidance
• assessments of the performance of the individual’s current pension funds
• inducements to hold certain investments within a pensions tax wrapper including overseas investments
• promotions of retirement income products such as drawdown and annuity products
• inducements to release pension funds early
• inducements to release funds from a pension and transfer them into a bank account
• inducements to transfer a pension fund
• introductions to a firm dealing in pensions investments
• offers to assess charges on the pension

The government intends to work on the final and complex details of the ban on cold calling in relation to pensions during this year. This will ensure, according to government sources, that we get draft legislation to ban cold calling in relation to pensions right. The government will bring forward legislation when Parliamentary time allows.

In the consultation, the government also proposed limiting the statutory right to transfer:

• transfers in to personal pension schemes operated by firms authorised by the Financial Conduct Authority (FCA)
• transfers in to authorised Master Trust schemes
• transfers where a genuine employment link to the receiving occupational pension scheme could be evidenced.

The government therefore proposes to require all new pension scheme registrations to be made through an active company, except in legitimate circumstances, where HMRC will be given discretion to register schemes with a dormant sponsoring employer. This requirement will extend to existing pension schemes if they are registered with a dormant sponsoring employer, with the same discretion so that HMRC can decide not to de-register a scheme in legitimate circumstances. This change will be legislated for in a Finance Bill in 2017. The existing right of appeal if HMRC rejects a scheme registration will apply to this new requirement.

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