Posted by Chris A Brown at 05/05/2020 10:19:54
The Pensions Regulator has released guidance for Pension Scheme Administrators, asking East Riding Pension Fund to be more vigilant when processing requests from scheme members to transfer their benefits. During a pandemic the financial uncertainty and change in the financial position of scheme members could lead to them making decisions they ultimately regret.
Anyone can be the victim of a pension scam, no matter how savvy they think they are. It’s important that everyone can spot the warning signs.
Scammers try to persuade pension savers to transfer their entire pension savings, or to release funds from it, by making attractive-sounding promises they have no intention of keeping.
The pension money is often invested in unusual, high-risk investments like:
- overseas property and hotels
- renewable energy bonds
- storage units.
Or it can be simply stolen outright.
Read our booklet on how to spot a scam (pdf 122kb)
Many scammers persuade savers to transfer their money into single-member occupational schemes, or other occupational pension schemes.
Savers could lose all their money and face a high tax bill from HM Revenue and Customs (HMRC) if they withdraw their pension savings before the age of 55.
Direct savers to the government’s Pension Wise service to understand their options.
All pension savers should speak to an independent FCA-authorised adviser before making a transfer, and in some cases are required to do so.
Changes to the stock market
As a defined benefit pension scheme the Local Government Pension Scheme is secure, the benefits that you receive from the scheme are not affected by changes in the stock market and are set as law by statuary instruments. This means that the value of your benefits will remain unchanged.
If you are paying Additional Voluntary Contributions to the Prudential, these benefits are defined contribution and depending on your individual plan may be affected.
Frequently Asked Questions (FAQs)
The Local Government Association have prepared some FAQs for scheme members, this includes what contributions you need to make during different types of leave of absence and information regarding how East Riding Pension Fund are operating during the pandemic. The FAQs can be accessed here:
ERPF COVID-19 FAQs (word 69kb)