I am trying to link up my various pension schemes into a single pension pot but my old provider has sent a questionnaire asking for my annual remuneration over the last 15 years. I have no idea how I would obtain this information or why it is important. Can you please explain?

Mark

Tom Selby, AJ Bell Head of Retirement Policy, says:

I have sympathy with your situation, which sounds very much like a provider taking an over-the-top stance on regulations designed to protect savers from pension scams.

Pension scheme members usually have a ‘statutory right to transfer’ which means they can, by law, move their pension to another scheme or provider. However, to combat the risk of fraud, the Pension Schemes Act 2021 removed this statutory right unless certain conditions are met.

There are two conditions which pension providers are required to check. If either of these conditions are met, the statutory right to transfer exists and so the transfer must go through.

The first condition covers transfers to three different types of pension scheme:

- Public sector schemes

- Authorised master trusts (a type of pension scheme usually associated with the workplace)

- An authorised ‘collective defined contribution’ scheme (a new type of pension scheme where members’ funds are invested collectively with the aim of achieving a target income in retirement)

The second condition applies to transfers to other types of scheme.

WHAT DO I NEED TO DO?

There are different requirements depending on the type of scheme. If you are transferring to an occupational pension scheme in the UK, you will be asked to demonstrate you have been employed by the scheme’s sponsoring employer for at least three months.

You should be able to do this by providing evidence such as payslips, and a schedule of contributions paid by your employer. You certainly shouldn’t need to provide employment evidence going back 15 years.

If you want to transfer to an overseas pension scheme then you will be asked to prove you are resident in the same jurisdiction as the scheme or that you have an employment link to the scheme.

For these transfers – and all other transfers, including to personal pensions like SIPPs – the second condition is met where the schemes’ due diligence shows there are no ‘red’ or ‘amber’ flags.

RED FLAGS

If there is a red flag, your statutory right to transfer falls away and your scheme could prevent the transfer going ahead.

Red flags occur where:

- You fail to adequately respond to requests for evidence or information

- An amber flag has been raised and you haven’t proven you attended a Moneyhelper guidance session (more on this below)

- An unregulated person has carried out a regulated activity in relation to the transfer

- You requested the transfer after receiving an unsolicited contact

- You have been offered an incentive to make the transfer

- You have been pressured to make the transfer

AMBER FLAGS

Where an amber flag is raised, you will be asked to attend a guidance session with Moneyhelper, the government-backed guidance service, on pension transfer scams.

Once you have done this, you will be given a unique identifier number by MoneyHelper that you can show as evidence you have attended the session.

Amber flags can be raised where:

- You have provided a substantive but incomplete response to a request for evidence or information

- The pension scheme from which you are transferring thinks some or all of the evidence provided may not be genuine, or that any required evidence may not have been provided directly by you

- The evidence does not demonstrate an employment link or residency link (only for a transfer to an occupational pension scheme or an overseas ‘QROPS’)

- There are high-risk or unregulated investments included in the scheme you are transferring to

- There are any unclear or high fees being charged by the scheme you are transferring to

- The structure of investments included in the scheme you are transferring to is unclear, complex or unorthodox

- There are overseas investments included in the scheme you are transferring to

- There has been a sharp or unusual rise in the volume of transfer requests to the same scheme or involving the same adviser and/or firm of advisers

While this might sound onerous, most pension transfers should still go through smoothly. If you feel your transfer is being held up unnecessarily or you are being asked to provide an unreasonable amount of information, speak to your pension provider in the first instance.

If they fail to address your concerns, you have the option of complaining to the Pensions Ombudsman, which deals with complaints relating to maladministration.

DO YOU HAVE A QUESTION ON RETIREMENT ISSUES?

Send an email to asktom@sharesmagazine.co.uk with the words ‘Retirement question’ in the subject line. We’ll do our best to respond in a future edition of Shares.

Please note, we only provide information and we do not provide financial advice. If you’re unsure please consult a suitably qualified financial adviser. We cannot comment on individual investment portfolios.

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