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PM pledges tough rules to tackle pensions abuse 24 January 2018
Irresponsible company bosses who “line their own pockets” while failing to protect workers’ pension schemes are to be hit with huge fines, under plans to be announced by Theresa May’s government within weeks.
Writing in the Observer after a week which saw the collapse of Carillion, with a deficit in its pension scheme of up to £900m, the prime minister says her government will act urgently to stamp out “abuse”.
Other measures being considered for inclusion in a white paper in March would give regulators new powers to block or place conditions on takeovers that are deemed to put pension schemes at risk. The regulator will also be given the power to request information about how companies run schemes.
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Pension scammers ordered to repay £13.7m taken from victims 25 January
245 members of the public were persuaded via cold-calling and similar techniques to transfer their pension savings into one of 11 scam schemes operated by Friendly Pensions Limited (FPL).
Victims were told that if they transferred their pension pots to the schemes they would receive a tax-free payment commonly described as a “commission rebate” from investments made by the pension scheme – a form of pension scam. On 23 January 2018 the High Court ruled that the four people who ran a series of scam pension schemes - David Austin, Susan Dalton, Alan Barratt and Julian Hanson - should repay the millions of pounds they took from the schemes over a two-year period (November 2012 to September 2014).
The Pensions Regulator (TPR) had asked the High Court to order the defendants to repay the funds they dishonestly misused or misappropriated from the pension schemes – the first time such an order has been obtained.
Austin laundered funds from the schemes into his bank account and the accounts of family members in the UK, Switzerland and Andorra through a number of businesses that he had set up in the UK, Cyprus and the Caribbean, including FPL. TPR showed the High Court evidence of how members of Austin’s family had lived a life of luxury using the money – including showing off their spending on expensive goods, ski holidays and trips to Dubai and the Mediterranean on social media sites.
Dalriada, the independent trustee appointed by TPR to take over the running of the schemes, will now be able to seek the confiscation of the scammers’ assets for the benefit of their victims.
Full details of how the scam worked have been issued in a TPR press release which also details case studies from three of the victims explaining just how they were conned into transferring their funds.
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Check a pension scheme member's residency status for relief at source 1 February 2018
Guidance has been published for pension scheme administrators about chekcing the residency status of members to ensure the right rate of tax relief is given using relief at source.
As a pension scheme administrator using relief at source you’ll need to know the residency status of each of your scheme members. You can then give them the right tax relief and reclaim it from HMRC.
The Chartered Institute of Payroll Professionals
Policy News Journal
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