A pension liberation scam is when scheme members are encouraged to transfer their benefits to another scheme, in circumstances that are not in their best interest. These scams are still very much a problem.

In 2014, the Finance Act tried to address the issue on a small scale by making it easier for HMRC to de-register schemes and making it harder for schemes to become registered.

Regardless of whether or not trustees suspect that a proposed receiving scheme is a liberation vehicle, scheme members still have a statutory right to transfer.

Linklaters, however, feels there is a better way to approach this growing issue. A Linklaters pensions partner says that most pensions liberation vehicles will already be registered and probably are under the radar. He added that instead of making it harder to register, “HMRC should publish a list of those registered schemes that it is content to see receiving transfers. The question of whether a member has a statutory right to transfer to a given scheme would then depend on whether that scheme was on the list”.

Linklaters believe that it shouldn’t be very difficult for HMRC to check whether or not a scheme should be put on the transfer list, by using existing tax info about the scheme and the sponsor or info from the FCA.