Key points
- The Pension Schemes Act 2021 (PSA 2021) gives the government the power to make regulations on statutory transfer requests.
- The PSA 2021 sets out that the regulations may include new requirements such as that the member:
- provides details and/or evidence of their employment and/or place of residence (e.g. payslips and utility bills);
- obtains information or guidance about exercising their transfer rights from a prescribed person. Members will need to provide evidence to trustees that they have complied with this requirement.
- Failure to meet the new statutory requirements upon requesting a transfer will mean that the statutory right to transfer is lost in respect of the request.
- The detailed requirements and consequences will be set out in regulations. As a result, immediate action is not required. However, trustees should remain vigilant about the wider issue of pension scams and be mindful of the forthcoming changes.

What does the PSA 2021 say about statutory transfers?
The PSA 2021 provides a power for the government to make regulations so that a member will only have a right to transfer if certain conditions prescribed in those regulations are met. This aims to help protect members from falling victim to pension scams but it is not intended to block legitimate transfers wherever possible.
The conditions that the regulations may prescribe include requirements in relation to:
- The member’s employment or place of residence or to provide the trustees with information or evidence about the member’s employment or place of residence. This is intended to combat some of the “red flags” of a scam scheme, such as where the member has no genuine employment link with the proposed receiving scheme or does not reside in the jurisdiction of the proposed receiving scheme. Evidence relating to the member’s employment may include payslips.
- The member obtaining information or guidance about exercising the transfer right from a “prescribed person” in a “prescribed case” or to provide evidence to the trustees that the member has complied with this requirement or is not subject to it. The government has said that this might cover obtaining information and guidance from the Money and Pensions Service, presumably where no regulated independent financial advice has been obtained.
The member will lose the right to transfer where a condition is not met. However, the transfer may proceed on a discretionary basis.
The Pensions Minister has confirmed that the government intends to consult on the regulations to be implemented and that they may include limiting the transfer right where one of the top four “red flags” identified by the Pension Scams Industry Group is present. This includes where the receiving scheme or parties in the transfer do not have the required permissions from the Financial Conduct Authority or where the member was contacted by email or cold call and / or offered a “free pension review”.
What does this mean for trustees?
We are likely to see some significant changes once the regulations are passed, however this may take some time given the consultation the government intends to undertake. Whilst trustees will not need to make any immediate alterations to the way in which they process transfer requests, they ought to be mindful of the likely forthcoming changes and deal with transfer requests prudently with reference to the guidance currently available.
What does this mean for sponsors?
Whilst trustees and administrators will usually be on the “front line” in dealing with transfer requests, sponsors will be concerned to ensure that transfers to scam schemes are prevented. There may be resultant costs for the scheme if the receiving scheme turns out to be a scam and the former member pursues a complaint against the scheme as a result.
Download our one-page overviews of the Pension Schemes Act 2021
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