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Law360, London (April 15, 2020, 12:26 PM BST ) Britain's pensions watchdog said Wednesday that it will give trustees more time to review transfer requests to help them fight would-be scammers seeking to take advantage of disruption created by the COVID-19 crisis.
Trustees will be given the additional time to process any transfers amid the coronavirus outbreak — which has killed more than 100,000 people worldwide — The Pensions Regulator said.
The watchdog said that trustees could need longer to deal with transfer requests because they have to prioritize paying out pensions and bereavement payments during the pandemic or because they need to reassess how transfers are calculated.
The Pensions Ombudsman — the body responsible for adjudicating disputes — will take into account the pensions watchdog's COVID-19 advice when it determines whether trustees took reasonable steps in any given situation.
TPR said the pensions industry "must step up and protect savers using every possible means" on top of the provisions set on Wednesday, as fraudsters will take advantage of the financial uncertainty associated with the pandemic.
"Being informed and risk-aware is especially important in a world turned on its head — and that's no different for pensions," the watchdog said. TPR added that savers and pensions providers must be as vigilant with pensions scams as with social distancing rules.
The regulator said that fluctuating stock markets could cause retirement savers to make rash decisions amid the pandemic and could be targeted by scammers, who are "looking for an opportunity to strike."
The watchdog also reminded trustees of their regulatory obligations to warn savers about the risks of the various retirement options available to them. They should also direct savers to the free pensions advice offered by the government through Pension Wise, a guidance service.
"Providers and trustees are the first line of defense in protecting savers from pension scams," TPR said.
The Pensions Regulator, the Financial Conduct Authority and the Money and Pensions Service warned in April that conmen will take advantage of vulnerable consumers who fear their finances will be hit by the coronavirus crisis.
The FCA said consumers should reject all unsolicited offers and get to know the warning signs of financial fraud, including "high rates of return which sound too good to be true, so-called special offers or pressure to make a quick decision."
The finance watchdog said last week that it will make pensions scams a priority for the rest of 2020 as the incidence of scamming is on the rise. Victims of pensions fraud could lose an average of £82,000 ($102 million), or 22 years of savings, within 24 hours of being targeted by crooks, a recent study found.
--Editing by Ed Harris.
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