Pension Liberation Swoop By Regulators

Regulators have appointed trustees to take over the running of a suspected pension liberation scheme to safeguard the retirement savings of investors.

The independent trustees were appointed by The Pension Regulator to manage the finances of the London Quantum Retirement Benefit Scheme, also known as the London Quantum Occupational Scheme.

Neither the regulator nor the trustees will comment on the move but admitted they had concerns the scheme was involved in pension liberation.

Pension liberation, sometimes called pension unlocking, allows retirement savers under 55 years old to access their funds although pension rules state no one under that age can draw pension benefits except in exceptional circumstances, such as serious ill health.

The regulator fears many of these schemes are scams or mislead retirement savers by charging high fees to arrange withdrawals while failing to tell them that HM Revenue & Customs (HMRC) will demand a 55% tax charge plus interest and other penalties for breaking pension rules.

Investigation under way

“Accessing pension money early is often on condition that cash transferred into a pension liberation scheme goes into a risky investment,” said a spokesman for the regulator.

The regulator explained that retirement savers can no longer pay contributions into London Quantum or take money from the scheme.

Trustees have started an investigation into how savers were sold their pensions and how their cash was invested.

The inquiry is gathering evidence such as documents, policy schedules and identifying the people involved in setting up and managing the scheme.

The trustees revealed the same person behind other pension liberation operations closed down by the regulator is also a key figure in the London Quantum scheme.

The other pension liberation schemes involved a firm called Ark Consultancy and other associated businesses which were also investigated by the regulator.

The trustees running London Quantum list the adviser behind the Ark scheme as a main contact.

The High Court ruled the Ark operation was a pension liberation scheme and closed them in 2012.

“We can confirm that we have an information gathering exercise underway and have written to scheme members asking them certain questions,” said a spokesman for the new trustees.

“We need to establish what the assets of the scheme were and where they are now. If we suspect pension liberation was involved, we will make every effort to recover as much money as possible to minimise the losses of any retirement savers.”

At this stage, the regulator has not in dictated how much money is involved in the London Quantum inquiry.

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