Sipp and SSAS provider Rowanmoor has welcomed the move announced this week by HM Revenue & Customs to change the process for registering pension schemes.
Earlier this week, HMRC announced a change in the process for registering a pension scheme, in a move designed to prevent pensions liberation fraud. Instead of using automatic scheme registration procedures, HMRC will now risk-assess all applications in order to determine whether to register the scheme. It will no longer be an immediate automated process to register a scheme and therefore more difficult for pension liberation fraudsters to set up schemes.
Pensions minister Steve Webb told a Commons committee this week that he believes over £420m of pension funds have been 'liberated' or transferred so far by these schemes. Some industry experts believe this is an underestimate of the size of the problem.
Experts also fear that some SSAS scheme transfers are being used to 'liberate' pension funds and many providers are keeping a close eye.
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As every new SSAS and Family Pension Trust must be individually registered, Rowanmoor is reviewing and updating its own procedures to ensure new schemes are established and authorised as quickly as possible following the decision by HMRC. Although timescales to establish new schemes will be affected as a result of HMRC's registration process change, the company says it does not anticipate that its customers will see any significant change in service levels.
Robert Graves, head of technical services at Rowanmoor, said: "We welcome the Government's decision to tighten up the scheme registration process. It is a necessary move that will ultimately help to prevent pensions liberation fraud and misuse of the pensions system. Member-directed pension schemes and SSAS in particular are under the spotlight as being easy vehicles for pensions liberation fraudsters.
"Whilst HMRC's move is a good and welcome step in the right direction, it would be great to see further moves to eliminate pension liberation fraud and reinstate confidence in the pension system. Accreditation of professional administrators could help ease HMRC's role in registering individual schemes and overcome some of the difficulties that still remain in making transfers between schemes. There will be some effect on the time it takes to establish new schemes and we will be monitoring this in order to ensure we maintain our exceptional standard of efficiency and customer service."