25 February 2016
A recent court ruling, Hughes vs. Royal London has over turned a decision of the Pensions Ombudsman who had upheld the provider’s decision to refuse to pay a transfer value. Tony Bacon, LCP Senior Consultant, shares his views on the potential impact this could have for future pension fraud victims.
Commenting on the High Court ruling in Hughes vs. Royal London, Tony said “Enough is enough. Pension scheme trustees, honest men and women doing a difficult job already, are now put in an impossible position. They are told by government and the regulator to carry out due diligence to ensure that they do not pay members’ hard-earned pension rights to crooks.
“But the legal position is now that if the due diligence reveals that they are being asked to pay out to a crooked scheme – where the likelihood is that the member will never see their money again and get a tax penalty for the privilege of being defrauded – then the DWP’s own pensions legislation means that they have to pay out anyway.
“This is completely unacceptable. It is time that the DWP acted and legislated so that trustees can say ‘no’ where there are obvious red flags, such as once in a lifetime ‘storage pod’ or Cape Verde timeshare investment ‘opportunities’ or unregulated ‘introducers’ involved. It would not be difficult. We would be happy to help the Department draft the few lines of legislation which would do the job.”