Looking to transfer a pension to IPM? Get your hands on a new transfer pack to make things easier

You recently read about the changes introduced in November 2021 by The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021, which are designed to further protect individuals from pension scams.

These regulations place greater responsibility on transferring schemes. It gives them the power to block a transfer if the scheme to which benefits are being transferred do not satisfy two specified conditions (this article has more information about these two conditions).

For transfers to personal pensions and SIPPs, it could be the case that receiving schemes will not satisfy the first condition. So, transferring schemes will need to consider the criteria for the second condition for a transfer to proceed.

This will involve the transferring scheme undertaking an assessment whether an amber flag is present. If this is the case, the transferring scheme has to point the client to Money Helper for them to receive guidance regarding pension-related scams. The scheme must also obtain further information from the client in respect of the transfer.

The transfer can only proceed when the client can present evidence to a transferring scheme that they have sought guidance from Money Helper, along with any additional information that is required.

If a red flag is present, the transferring scheme must stop the transfer.

What we have seen so far…

Six months into the new regulations, our experience suggests the rules are still catching clients and advisers off guard.

Each pension provider is interpreting the regulations in their own way, applying them to their processes as best they can all with the aim of protecting clients from harm.

However, it seems clear that the new regulations are leading to delays in genuine transfers to schemes where an amber flag has been raised.

This is mainly due to clients and advisers being unaware of the need to seek guidance from Money Helper, and that they may need to provide additional information regarding the transfer.

Due to the IPM SIPP being a bespoke SIPP, which can cater for a wider range of investment flexibility, we are seeing occasions where transferring schemes are raising an amber flag on transfers to us and might need to perform additional checks before a transfer can be executed.

These checks would usually involve the ceding scheme coordinating directly with the client – not with the adviser and not with IPM. Indeed, our recent experience has shown that transferring schemes cannot accept information from any third party.

Instead, they want the client to demonstrate that they are fully aware of the pension arrangement they are transferring to and ensure that they have received the appropriate literature on the receiving scheme.

They also require the client to understand the reason for the transfer and know how the funds will be invested.

What we are doing to help…

Overall, we support any regulations that help protect clients and make information more freely available about the dangers of pension-related scams.

That said, we can see the impact these latest set of rules are having on a practical basis.

For those advisers and clients who have worked with IPM regularly, you will know that we always do our best to help. On this occasion we are limited in what we can do to assist, as the onus is very much on the transferring scheme to lay out their requirements and for them to liaise with clients directly to satisfy these.

Some transferring schemes have contacted us to understand the nature of our SIPP and we are pleased that some are taking a pragmatic approach to working with us.

We have put together a transfer information pack (click here to request one) including the documentation that we are seeing transferring schemes request about IPM, over and above the usual request for confirmation of HMRC scheme approval.

This pack can be emailed to transferring schemes, clients, or their advisers should a scheme a client is transferring from want more information on IPM.

Request this here if you’d like one.

Included in this pack are the following documents:

1. HMRC evidence that confirms that the IPM Personal Pension Scheme (the IPM SIPP) is an open and active pension scheme
2. Information Commissioner’s Office evidence
3. Evidence that IPM are registered with the Pensions Regulator
4. A copy of IPM’s trust deed and rules
5. IPM’s fee schedule
6. IPM’s key features booklet
7. IPM’s standard asset list
8. Details of the assets IPM deem to be non-standard and our processes relating to this
9. Link to Companies House for IPM Personal Pension Trustee Limited (asset trustee of the IPM SIPP)
10. Link to Companies House for IPM SIPP Administration Limited (the operator of the IPM SIPP).

With all this said, for any transfer to IPM (or any other personal pension and SIPP) we are very much dependent on how the transferring scheme interprets the regulations and what approach they will take.

Advisers and clients finding this out as soon as possible is key in setting expectation levels as to how long a transfer is likely to take.

Some other things we have learned over the last few months that will help you and your clients

Other things we have learned over the last few months, which can help all parties work with the new regulations, are as follows.

Start the transfer process sooner

If there is a need for a transfer to complete in a timely manner – for example, for the payment of benefits or for a commercial property purchase – then initiating the transfer advice process a few weeks earlier will allow for any increased time the transfer takes as a result of the new regulations.

Speak to the transferring scheme about the transfer

If you can speak to the current provider as to whether a transfer you are recommending will trigger an amber flag, this will allow you to advise the client as to the likely process they will need to follow to carry out their transfer.

Make the client aware of Money Helper

Money Helper is a government service designed to give guidance to individuals on pension-related scams and how best they can protect themselves from these.

Where a receiving scheme is deemed to have an amber flag, pointing clients to Money Helper during your transfer recommendation process can assist with not only ensuring a client knows where to go to receive this guidance, but also to ensure that this is done at the earliest possible opportunity.

Get in touch

We are always interested in hearing your feedback as to how the new regulations are affecting you and if you feel there is anything IPM can be doing more to help. Please feel free to contact us in the usual way.

Email info@ipm-pensions.co.uk or call 01438 747 151.