Pensions Insight: 6 November to 13 November 2023

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This insight covers the Ombudsman’s first determination on the Transfer Regulations and overseas investments, the absence of pensions in the King’s Speech, points to note from the Economic Crime and Corporate Transparency Act 2023, the first superfund transaction, an update on dashboards and the FCA’s ban of an IFA for incompetent DB pension transfer advice.

Pensions Ombudsman first determination on Transfer Regulations: trustees acted reasonably in raising overseas investments amber flag


We report on a helpful Pensions Ombudsman (TPO) decision on the application of The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 in the case of overseas investments – TPO decided that a trustee had not acted unreasonably by raising an amber flag in reference to a member’s request to transfer their benefits to a receiving scheme that would permit the member to invest in global funds.

This is a welcome development given the concerns raised that the Regulations are catching not just pension transfers with scam indicators but also those where there is low scam risk. This is because an amber flag is raised where there are any overseas investments in the receiving scheme (see our Insight). These concerns have been acknowledged by both the Department for Work and Pensions (DWP) and The Pensions Regulator but we are still awaiting confirmation from the DWP as to how it will address the issue.

The Regulations and overseas investments

The Regulations stipulate that an amber flag is present where trustees decide that “there are any overseas investments included in the receiving scheme”. An amber flag means that the member must obtain pensions safeguarding guidance from MoneyHelper before the transfer can proceed.

Although ‘overseas investments’ are not defined, “overseas” is meaning “wholly or partly outside of the United Kingdom”. Also defined is the term “included in” which means investments that will be made straight after the transfer or that are already being made with other receiving scheme members’ savings.

Relevant facts

The member responded to a question in the transferring scheme’s due diligence process stating that his benefits under the receiving scheme would be invested in ‘global funds’. This led the trustee to raise an amber flag. The trustee noted that the Regulations caught more schemes than ‘perhaps intended’, but that legal advice obtained had confirmed that a MoneyHelper referral was needed where “there are any overseas investments included in the receiving scheme”.

Although the transfer did proceed after the member obtained pension scam guidance, the transfer value was approximately £20,000 less than the member was originally expecting. The member complained to TPO that this reduction in value was due to the trustee’s mistaken understanding of the Regulations noting that, although “the fund may contain shares within companies who are based overseas”, the receiving scheme was registered in the UK and the funds would be invested by UK-authorised and regulated investment managers. The member said that his transfer had been unreasonably delayed and that this had caused him financial loss.

TPO decision

TPO dismissed the member’s complaint. He considered the way in which the Regulations refer to overseas investments noting that it is not necessary for the transferring member’s benefits to be invested in overseas investments in the receiving scheme.

TPO focused on the decision-making process of the trustee. He noted the trustee’s due diligence process, including that it had obtained legal advice (obtaining and acting in accordance with legal advice can protect a trustee should an issue later arise) and confirmed that the trustee was entitled to conclude that there were overseas investments in the receiving scheme. Therefore, based on a literal interpretation of the Regulations, the trustee had not acted unreasonably by requiring that the member attend a safeguarding appointment.


As noted by TPO, there are differing views on how the Regulations should be applied in respect of overseas investments. Some trustees have taken a cautious approach like the trustee in this case and raised an amber flag where they believe overseas investments are present. Others have adopted the alternative approach referred to in Regulator guidance and, where scheme rules have permitted, granted discretionary transfers without requiring the member to obtain guidance where they conclude that there are overseas investments but there is a low scam risk.

Although TPO’s decisions are not binding on other schemes, it is currently the only legal ruling on this point and will reassure those trustees that have adopted a literal interpretation of the Regulations. Although the decision did not disaffirm a non-literal approach, trustees who have previously adopted a ‘purposive’ approach may reconsider this approach and adopt a more literal stance going forward, at least until we have clarification on the wording of the Regulations which as TPO referenced “may not be aligned” with their “intended practical application”. We know that the DWP is considering further the issues regarding overseas investments (and incentives) and we hope that this review takes place sooner rather than later.

No mention of pensions in the first King’s Speech

The anticipated Pensions Bill did not feature in the King’s Speech on 7 November 2023. The speech was expected to mention the Chancellor’s ‘Mansion House’ reforms, intended to drive higher levels of investment in private equity via pensions (See here for our Insight) but no mention was made of legislation in this area and we will now have to wait to see what the Chancellor says in his 22 November Autumn Statement.

The audit regulator, the Financial Reporting Council, was disappointed that the Audit Reform Bill was also omitted which will create its successor body the Audit, Reporting and Governance Authority.

The Pensions and Lifetime Savings Association (PLSA) has said policy reform is still possible through secondary legislation or guidance. It is expected that secondary legislation expanding automatic enrolment will be proposed shortly.

Although pensions were absent from the King’s Speech, it did reference data protection legislation which is relevant to the pensions industry. The Data Protection and Digital Information (No. 2) Bill will be carried over and renamed as the Data Protection and Digital Information Bill (see our Insight for details of the Bill). This legislation will ‘update and simplify’ the UK GDPR and the Data Protection Act 2018.

Economic Crime and Corporate Transparency Act 2023

The Economic Crime and Corporate Transparency Act 2023 received Royal Assent on 27 October 2023 (see here for Government factsheet). This and the Economic Crime (Transparency and Enforcement) Act 2022 are designed to stop misuse of the UK corporate framework and to ‘tackle’ economic crime.

Of particular relevance to pensions are reforms which could impact corporate trustees, and also limited partnerships (LPs) and Scottish limited partnerships (SLPs) that are often used in asset-backed contribution arrangements (see Pensions Regulator guidance). They include the following:

  • Expanded role of Companies House: Companies House will have additional powers and new objectives so that it can act in a more regulatory way than at present. For example, it will be able to question suspect appointments and filings and reject filings.
  • Identity verification measures: Company directors, People with Significant Control of an entity, partnership members and persons delivering documents to Companies House will have to verify their identity. More detail can be found in the Government’s factsheet here.
  • Controls over setting up companies and making filings: There will be new controls on who can set up a company and submit filings – such persons will need to be verified and adequately supervised in a money laundering capacity.
  • LPs and SLPs: The abuse of LPs and SLPs will be addressed through enhanced registration and transparency conditions, and deregistering capabilities where the partnership is dissolved or no longer in business. They will also need to have closer links with the UK by maintaining a registered office in the UK.
  • Prohibition of corporate directors: As part of the implementation of the Act, the Government will also bring into effect corporate director changes which were made by the Small Business, Enterprise and Employment Act 2015, but which are not yet in force (see February 2022 White Paper). These changes will prohibit corporate directors (a company acting as a director of another company) subject to limited ‘principle-based’ exceptions which will permit a corporate entity with ‘legal personality’ to act as a corporate director if all the directors are ‘natural’ persons whose identity has been verified. Companies with corporate directors will have a year to comply.


Much of the Act requires secondary legislation, guidance and framework implementation before it can come into effect so there will be a period before the provisions are effective.


Those affected will need to comply with the new requirements including identity verification and, where relevant, consider corporate director appointments which will need to be revised if the principle-based exemption cannot be satisfied.

Clara-Pensions agrees UK’s first superfund deal

Clara-Pensions has agreed the first pension superfund transaction with the trustees of the Sears Retail Pension Scheme.

Under the agreement, the 9,600 Sears members will be transferred into the Clara-Pensions superfund. Sears scheme members will benefit from the added security of £30m of ring-fenced capital which Clara will provide to the existing £590m scheme. The scheme’s assets will be used to generate returns to pay pensions with the aim of securing a full buyout with an insurer later down the line.

The trustees of Sears have written to all members informing them about the transfer which will begin at the end of November. The transaction received clearance from the Pensions Regulator on 2 November 2023.

To date Clara-Pensions is the only superfund that has been assessed by the Regulator. Clara notes that it has been liaising with around a dozen schemes regarding possible transactions so we may see further superfund transaction announcements in the not-too-distant future. We are also expecting superfund legislation to be introduced by the Government (see our Insight), albeit there was no mention of this (or pensions generally) in the recent King’s Speech (see above).

Pensions Dashboard Programme progress report

The Pensions Dashboard Programme has recently published an update report providing an overview of the work done since April 2023 ahead of the new statutory connection deadline for occupational pension schemes of 31 October 2026. The Financial Conduct Authority (FCA) is also amending its rules so that there will be equivalent requirements for FCA-regulated pension providers.

Industry engagement will take place in autumn 2023 on the guidance with the aim being to publish this at least 12 months ahead of the first connection date in guidance.

The report encourages pension providers and schemes to continue to prepare for dashboards and work through any issues now. The report also reiterates why the dashboard is necessary – to encourage pension engagement and help consumers plan for retirement and make more informed decisions.

FCA bans Geoffrey Armin for failures in advice to British Steel Pension Scheme Members

The FCA has found that Geoffrey Armin was seriously incompetent when advising on the defined benefit (DB) transfers while running Retirement and Pension Planning Services (RPPS) (dissolved).

Mr Armin provided unsuitable advice to customers after failing to obtain the necessary information to assess the suitability of a pension transfer including their financial situation and income needs throughout retirement. In some instances, Mr Armin only informed customers of the consequences of giving up the valuable benefits offered by their DB pension after he had recommended the customer transfer.

174 members transferred out of the scheme following his recommendations amounting to £2.2m in transfer advice for all DB transfers.

Mr Armin has been ordered to pay £200,000 directly to the FSCS to contribute towards any redress due to RPPS customers. Mr Armin has been banned from advising customers on pension transfers and pension opt-outs and from holding any senior management function in a regulated firm.

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