The Pensions Regulator (“TPR”) has again set its sights on pension scammers and there’s good reason for doing so. The latest figures from Action Fraud show that a total of £17.7 million was reported lost to pension-related fraud in 2023. The average loss to each individual pension scheme member was £47,000. This is, however, expected to be a substantial understatement of the true extent of the pension scams landscape – the Financial Conduct Authority (“FCA”) estimates that, in reality, less than one in five scams are actually being reported.

What is TPR planning to do?

The scourge of pension scams has been an increasing area of concern to TPR over the last few years. Its work to combat this issue to date includes its joint initiative with the DWP to bring in stronger legal protections governing statutory pension transfers; its multi-million-pound joint “ScamSmart” campaign with the FCA; and its push for higher industry standards with its pension scams “pledge”. TPR has also dabbled with more creative initiatives such as the pension scams storyline in the BBC’s EastEnders which aimed to educate the wider public about the dangers posed to them by scammers.

However, TPR recognises it still needs to do more and so has announced in its recent blog that it plans to significantly boost its intelligence, working more closely than ever before with its partners in the multi-agency Pension Scams Advisory Group (“PSAG”) to stay one step ahead of scammers.

PSAG is led by TPR and comprises the DWP, FCA and the Money and Pensions Service (among others). It focuses on uniting law enforcement, government and the pensions industry in order to combat pension scams and fraud through education, prevention and enforcement.

TPR has confirmed that its latest initiative is to embed intelligence experts within critical agencies including the City of London Police and the National Economic Crime Centre. These “strategic secondments” are intended to strengthen cooperation between law enforcement and the pensions industry as well as interlinking TPR’s approach with the wider national fraud strategies. The intention is that by placing TPR representatives in these organisations, all parties can “leverage each other’s unique expertise and knowledge, bringing together new ideas and insights”.

What does TPR expect of Trustees?

TPR is clear that effective protection and prevention will require strong industry-wide collaboration. Therefore, trustees and their administrators will need to play an essential role in reporting suspected scams to Action Fraud as well as developing and adopting robust anti-scam processes.

In particular, TPR sees the intelligence provided via reporting as vital to its mission to prevent and disrupt scams by deepening PSAG’s understanding of the pension scam landscape. By increasing the reporting of suspected scams, there will be a greater level of identification at an earlier stage giving enforcement agencies the opportunity to intervene – thereby preventing further harm to other savers.

Trustees should be mindful that TPR sees the trustee role as being a crucial first line of defence against pension scammers. Therefore, in addition to complying with the tougher legal requirements governing statutory transfers, trustees should also actively engage with their administrators about their reporting processes where potential scams have been identified and consider whether these processes need to be strengthened in light of TPR’s latest campaign.