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Articles by Ben Fairhead
Decision highlights confusion in UK regulation of overseas pension transfers
It comes after a pensioner referred to as ‘Mr W’ sought financial compensation after the value of his overseas pension transfer fell during a delay while he was required to seek a MoneyHelper safeguarding appointment to discuss the transaction. He argued that a trustee, who had caused the delay by raising an ‘amber flag’ over his transfer request, had not correctly interpreted the 2021 Occupational and Personal Pension Schemes (Conditions for Transfers).
Fund managers could see ‘anti-ESG’ litigation risk flare without new guidance
In the US, where there is increasing polarisation of the political system, there has been a backlash by the right against what they consider to be the “left-leaning ESG agenda” of president Joe Biden and the Democrats. A recent example of this is the claim being pursued by Wayne Wong and four others, including a train operator, a teacher, and non-profit organisation ‘Americans for Fair Treatment’, against the trustees of three New York City retirement systems.
Overseas investment ‘amber flags’ creating delay in UK pension transfer market
The large volume of amber flagged transfers has resulted in a surge in requests referred to MoneyHelper, and a corresponding increase in waiting times for a pension safeguarding appointment. The wait time for an appointment has increased from an average of two to six weeks over the 18-month period of the regulations, according to the report.
TPO upholds pension transfer complaint against Teachers’ Pensions
Ben Fairhead of Pinsent Masons said pension firms should pay close attention to the ombudsman’s conclusion that TP did not conduct sufficient due diligence checks when transferring the complainant’s pension benefits from the Teachers' Pension Scheme (TPS) to the London Quantum Pension Scheme (LQPS). TPO also found that TP failed to warn the complainant, referred to as ‘Mrs G’, of the potential consequences of transferring her pension.
High Court ruling a warning to lawyers who ‘shoehorn’ claimants into class actions
Master Davison said that the way these military NIHL claims are being managed was “analogous to the procedures that would be adopted under a Group Litigation Order (GLO)”, which carries a mandatory requirement to issue a claim form and pay the relevant court fee for every claim on the register.
High Court rejects maladministration claims against pension scheme directors
CA 2006 sets out the general duties which a director owes to a company. Under s171 there is a duty on a director to act within their powers – to act in accordance with the company's constitution, and only exercise powers for the purposes for which they are conferred. S172 CA 2006 creates a duty on a director to promote the success of the company for the benefit of the members as a whole.
‘No quick fix’ for UK amber flag pensions rules issues
A pensions expert has warned that there is “unlikely to be a quick fix” for issues with new rules designed to prevent transfer scams, after reports that transfers involving low-risk overseas investments are also liable to being blocked. It comes after the Department for Work and Pensions (DWP) told the parliamentary joint committee on statutory instruments that officials had been notified of a potential problem involving too many pension transfers being given an ‘amber flag’.
Implementation of ‘red and amber flag’ regulations reveals pension transfer risks
Other amber flags give rise to similar difficulties. ‘High fees’ are defined as being potentially merely at the high end of the normal range of fees in the current financial market. There is the same problem with ‘high risk’, which is defined as the “high end of the normal range of risk in the current financial market”. The breadth of these flags was deliberate, given a desire to allow as much leeway as possible to those looking to stop suspicious transfers.
UK government announces further anti-pension scams plans
The UK government has again committed to tackling pension scams, pledging to release a Fraud Action Plan and review its planned flag system for pension transfers regularly. In a response to a House of Commons Work and Pensions Committee report on protecting savers from pension scams, the government admitted more needed to be done to tackle the problem and enforce the rules against scammers.
Searching for the antidote to the scorpion's sting
Seven years on from the Valentine's Day launch of the Pensions Regulator's scorpion campaign, the scorpion has technically disappeared and been replaced by a jet skier – but its memory lives on. I look back in this, my seventh annual piece for Actuarial Post, at developments in the world of pension scams over the past year, particularly on a heightened focus on the harm suffered by victims of pension scams to date and what prospects they have of achieving redress.
Why Is Pension Fraud So Common?
Collecting our pension after much needed retirement is what many people look forward to, however, for some, it may result in a less expected shock: fraud. Speaking with Ben Fairhead, we explore why pension fraud is common and how people can avoid finding themselves in dispute. Pension liberation fraud is seen as one of the most common forms of financial crimes; from your opinion, why is it so common?
The scorpion takes to the water
By Ben Fairhead, Partner at Pinsent Masons and a member of the Pension Scams Industry Group Cold calling ban As a first step, the cold calling ban did finally become reality, taking effect in January of this year. We have seen a fair amount of scepticism in the press and from the pensions industry since this was implemented, questioning how effective a deterrent this will be.
KeyMed pension trustees owed no fiduciary duty to scheme employer
The clarification came as part of a lengthy judgment by the High Court on claims of fraudulent conspiracy and breach of duty brought by KeyMed, a subsidiary of the Olympus Group, against two former directors of the company. Although the point only accounted for a small part of the judgment, it is an interesting one as there had not previously been any case law authority on whether a trustee of a pension scheme owes any fiduciary or equitable duty to a sponsoring employer.
UK’s pensions regulator cracks down on scams with use of new powers
According to its quarterly compliance and enforcement bulletin (15 page / 63KB PDF) TPR used several powers successfully for the first time in the second quarter of 2018. In an investigation into pension fraud, it secured production orders under the Proceeds of Crime Act 2002 for the first time. The orders required a bank to hand over statements and other details of the accounts linked to the trustees of a pension scheme, which were needed for the ongoing criminal investigation.
Pensions Regulator acts to warn trustees over transfer activity
According to a report in the Financial Times, the regulators have written to companies in the process of merging including J Sainsbury and Asda, as well as those where there has been a spike in transfer activity. TPR said it was generally not in a saver’s best interest to transfer out of a defined benefit (DB) scheme. The letters follow a review last year which found that less than half of the advice given to members of DB schemes about transferring their pensions was suitable.
Appeal court restores public sector pensions investment guidance
Its judgment overturns that of the High Court, which found last year that the relevant parts of the guidance did not have a "pensions purpose". The Court of Appeal said that the judge's analysis of the 'purpose' of the guidance had been "unduly narrow", and that the secretary of state had been "entitled … to take into account wider considerations of public interest" when drawing up the guidance.
Allowing the scorpion to survive and evolve
By Ben Fairhead, Partner at Pinsent Masons and a member of the Pension Liberation Industry Group Cold calling ban Unsurprisingly, the 111 consultation responses reflected "overwhelming" support for a ban on cold calling. It also appears that the government has been persuaded to make this ban reasonably wide in scope, for example extending it to all electronic communications about pensions.
MPs announce wide-ranging inquiry into pension freedoms
The committee is particularly interested in how the way in which people access their pensions has changed since the 'freedom and choice' reforms were introduced, and whether savers are taking proportionate advice or guidance before making financial decisions. It is also seeking views on whether the government and regulators are doing enough to prevent people from being 'scammed' out of their pension savings.
Pension websites warning shows scams evolving, says expert
A number of suspected scam websites that have been referred to the regulator carry prominent anti-scam messaging and warning messages which imply that they are legitimate investment vehicles, according to a statement from The Pensions Regulator. The Department for Work and Pensions (DWP) recently confirmed that it would legislate for a ban on unsolicited calls, texts and emails relating to pensions; as well as new restrictions on the statutory right to transfer pension savings.
Starving the scorpion of its prey
By Ben Fairhead, Partner, and Nicola King, Solicitor, at Pinsent Masons Pension scams consultation Far and away the most significant development in the pension scams arena in the past 12 months has been the consultation launched by the DWP and HM Treasury in December. This followed increasing momentum from industry and particularly groups like the Pension Liberation Industry Group during the summer and autumn of 2016 to press for changes to the law to tackle pension scams.
'Employment link' test should help deter pension scammers, expert says
Provided it is sufficiently onerous, the proposed requirement that the saver have a 'genuine employment link' with the receiving scheme would deter those behind the vast majority of pension schemes that have, in recent years, been presented as pension scams or 'pension liberation' models.
Ombudsman: no statutory right to transfer when pension already in payment
The individual, known only as Mr I, had been told by trustees Aon Hewitt that as a retired member, he had no statutory right to transfer his benefits out of the Banca Commerciale Italiana Retirement and Death Benefits Scheme (BCI scheme). Checks carried out as part of the transfer process had also shown that the receiving scheme "may be associated with pension liberation", according to the ombudsman's determination.
Ombudsman backs pension provider over transfer to suspected liberation scheme
The individual, known only as Mr T, claimed that Royal London should have made "adequate checks to ensure Capita Oak was a genuine pension scheme" before allowing him to transfer £112,541.90 to the new provider in November 2012. The ombudsman disagreed, finding that there was "no evidence" that Royal London had "any specific concerns" about the receiving scheme that "might have warranted a refusal of Mr T's statutory transfer right".
Tribunal dismisses challenge to tax charge resulting from use of 'pension liberation' scheme
Although decided by the first-tier tribunal and therefore not binding on another tribunal or court, the case appears to be the first reported one arising out of the taxation of individuals getting caught up in suspected pension liberation schemes, according to pension disputes expert Ben Fairhead of Pinsent Masons, the law firm behind Out-Law.com.
Insufficient pension guidance and advice endangering UK savers, says Work and Pensions Committee
In a new report, the Work and Pensions Committee said that the success of new pension rules introduced in April depended on "good quality, co-ordinated and accessible guidance and advice". Reports of "lower than anticipated" take-up of Pension Wise, the free-to-access government-backed guidance service, were therefore a cause for concern, it said.
Pensions Ombudsman's decision potentially a 'pyrrhic victory' for saver who transferred £100,000 into suspect scheme
The ombudsman said that although transfer requests made by Mark Crossland to Omni, trustee of the Henley Retirement Benefit (Henley) Scheme, were not in the proper form, the saver would have acquired a statutory transfer right had he later submitted a full transfer request. It was only due to "maladministration" on the part of the trustees, who did not respond to Crossland's letters, that this did not occur, he said.
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