Tisa has welcomed plans to expand the range of pension transfers that can use the streamlined Condition 1 process but has called for clearer rules on how receiving schemes are classed as “reputable”.
In its response to the Department for Work and Pensions’ consultation on pension transfer regulations, Tisa said the proposed test should be supported by clear guidance referenced in legislation to ensure schemes apply the threshold consistently.
It argued that where a receiving scheme is known to be genuine, transfers should proceed through Condition 1 without requiring further checks or flags. It also said responsibility for determining whether a scheme is operating legitimately should be with regulators instead of ceding schemes.
Tisa also raised concerns about the proposed treatment of Small Self-Administered Schemes (SSASs), arguing that many legitimate schemes continue to operate after their original employer link has ended.
It called for the reintroduction of pensioneer trustees to provide professional oversight, help raise administration standards, support member trustees in meeting their responsibilities and reduce the risk of regulations being breached inadvertently.
Tisa head of policy: products & long-term savings Renny Biggins says: “We welcome the intention behind these reforms to make legitimate pension transfers safer and more efficient. However, that objective will be undermined if the proposed ‘reputable’ threshold is left open to interpretation. Different ceding schemes could reach different conclusions about the same receiving scheme, recreating the inconsistency and delay the changes are intended to address. More robust guidance is required to help ensure consistent outcomes.
“Secondly, while ceding schemes have an important role in protecting members from scams, they should not be expected to assess the wider merits of other providers. That is the responsibility of the regulators. Once a scheme has been established as genuine, the transfer should proceed without further flags creating unnecessary friction.
“An employment link is a poor proxy for whether a SSAS is genuine, particularly where an established scheme has simply outlived the business that created it. Requiring professional trustee oversight instead would target the real risk more effectively by strengthening governance and reducing avoidable compliance failures.”