Moves to clean up Qualifying Recognised Overseas Pension Schemes for expats is missing the mark, according to critics.
The aim is to stop fraudsters stealing pension cash by making more checks into the people behind the scheme and the way money transferred in is invested and managed.
The Pension Liberation Industry Group (PLIG) is updating an out-of-date code from three years ago with a new document that now covers QROPS as well as onshore pensions.
But although the group claims some onshore self-invested personal pensions (SIPPs) and QROPS are suspected frauds, others say the government has already rooted out most of the bad apples with the overseas transfer charge.
The charge was introduced in March 2017 by Chancellor Phillip Hammond.
QROPS risk falling
The charge allows transfers from UK pensions or QROPS to a QROPS when the saver lives in the same country as the pension is based or within the European Economic Area for an EEA QROPS – but demands a transfer fee of 25% of the fund moved to the QROPS if not.
Darren Cooke, a chartered financial planner at Red Circle Financial Planning, based in Derby, who launched a petition calling for the government to ban cold calling that is shortly to become law argues QROPS have been favoured by pension scammers for some time, but the risk is falling.
“The QROPS legislation introduced last year has reduced it a bit. So, on some extent the code is a little behind the curve. I actually think scammers are switching back to using SIPPS and small self-administered schemes (SSAS) again.”
PLIG member Ben Fairhead, a partner at law firm Pinsent Masons, said: “For QROPS, we have a particular section on due diligence around this, which we didn’t have in the previous code. This is a recognition that there is a lot of suspicion around some the QROPS that are out there.
“More can be done to raise awareness of the risks of taking your pension money out and putting into some suspect investment.”
PLIG is an industry group with membership made up from pension providers, consultants, regulators and trustees.