Whilst the regulations set out the information needed to evidence the residency and employment link, it is up to trustees to determine what other evidence, if any, they need to determine if any other flags are present.
The Regulator’s guidance notes that due diligence should still be undertaken in line with the guidance where a member does not have a statutory right to transfer but is able to do so under the scheme rules.
Refusing a transfer
A decision as to whether a transfer should be refused should be made on the "balance of probabilities". An audit trail of the consideration and decision process and the contact with the member should be retained. Suspicions of a scam should be reported to the relevant bodies – see the ‘report a scam’ section of the Regulator's ‘Avoid pension scams’guide.
There are various points during the new regime when members must be communicated with.
Members should be told that one of the two conditions must be satisfied within one month of the date of the transfer application or request being made (unless the transfer has already gone ahead).
The member must also be notified where either condition is met, no later than the date the member is informed that the transfer has taken place.
The timescale for informing a member that a transfer cannot go ahead and that, if applicable, they have lost their statutory right to transfer out in respect of that request is quite short; members must be informed within seven working days of the decision to refuse the transfer being made.
Revisiting a decision
A decision that neither condition is met can be reconsidered where the trustees realise that a wrong decision was made, or the member provides additional evidence or information and there was 'good reason' for the delay which has been 'no longer than necessary'.
PSIG’s 'Combating Pension Scams: a Code of Good Practice' is currently being revised and an updated version should be available later this year.
The Government will review the regulations within 18 months to check that they are still as "effective as possible in targeting evolving methods used by scammers".