In its response to HM Treasury’s consultation on pension transfers and early exit charges, the group said a failure to raise standards in line with other industries could put the retirement savings of millions at risk.
Margaret Snowdon, chair of PASA, said: “This consultation provides a welcome focus on part of the industry that needs a significant overhaul. The new pensions freedoms gave the pensions industry an opportunity to refresh and revitalise pension savings, but we also carry a greater risk if we fail to better safeguard the money entrusted to us.
Snowdon highlighted ‘plentiful’ stories of fraud and scams, adding that present mechanisms for detection and resolution are not up to standard, largely relying on exchanges of paper and ineffective registers. She said transfers needed to be subject to much tighter processes to prevent fraud and money laundering.
She added: “Given that money can be switched between bank accounts within a matter of hours, it is not unreasonable that pensions are expected to act in a similar way.”
The PASA outlined three basic options to support this: the first is to create a common discharge that could be used by any scheme; the second is to encourage the wider adoption of pension services; and third is that trustees should be pushed to treat transfers with greater priority.
