Pension transfer refused due to incentive

Pat38493

WYSPECIAL said:

Pat38493 said:

Tommyjw said:

Not sure jumping straight to MoneyHelper helps in any way, that's a step designed for Amber flags that is required to have that further appointment, and serves absolutely no purpose in the designation of something being a red flag.

Red flags are just simply a straight no (unless the scheme decides to treat it with some subjectivity which has its own risks for them)

I am assuming this DB is worth less than £30K.  So are you saying that the DB provider can use this loophole to block the request completely and nothing can be done about it?

OP states it is a DC scheme

Sorry yes but then my point stands even stronger?

LHW99

Have you asked HL what their opinion is, and if they can help? They are supposed to pull the pension in from the other company, so may have experienced this before & have a work around?

jamesd

You might be able to transfer to another firm then from there to HL.

HL are usually willing to extend the time for their offers if you ask and if you ask them for help in this situation it's even more likely.

Tommyjw

Pat38493 said:

Tommyjw said:

Not sure jumping straight to MoneyHelper helps in any way, that's a step designed for Amber flags that is required to have that further appointment, and serves absolutely no purpose in the designation of something being a red flag.

Red flags are just simply a straight no (unless the scheme decides to treat it with some subjectivity which has its own risks for them)

I am assuming this DB is worth less than £30K.  So are you saying that the DB provider can use this loophole to block the request completely and nothing can be done about it?

If the OP puts in a transfer request to a provider that isn't offering cashback - will they then say it's a red flag because the inbound provider is offering reduced or no charges for x months as most of them offer at least some kind of incentive like that?

You will probably struggle to find a DIY provider who isn't offering some kind of incentive to transfer in, even if it's just a few months of free platform fees.

On your other point its the exact same if coming from DB pr DC. Can they do this ? By the literal wording of the regulations yes, unfortunately, whether they can be challenged beyond complaint level I am unsure.

https://www.legislation.gov.uk/uksi/2021/1237/made 

(5) There is a red flag present where the trustees or managers of the transferring scheme decide that—
(c)the member has been offered an incentive to make the transfer; or

incentive”—

(a)

includes an offer of one or more free pension reviews, access to some or all of the member’s pension savings before they attain normal minimum pension age, a savings advance or cashback from their pension savings;

As mentioned there's been several back and forths but nothing has been rewritten, schemes understandably using some logic here, some not. You just have to wonder how the wording passed through so many levels as if they didn't see exactly what would happen

artyboy

Blimey, and I thought my 'yellow flag' hold up due to the possibility of 'overseas' investments in my receiving scheme (yep, a global tracker like HMWO is a potential scam and no mistake 🙄 ) was bad enough.

These badly drafted regs and the equally badly applied CYA approach from some trustees needs sorting out, and fast. I'm just glad I never mentioned all the incentives that I was getting for transferring!

dunstonh

Blimey, and I thought my 'yellow flag' hold up due to the possibility of 'overseas' investments in my receiving scheme (yep, a global tracker like HMWO is a potential scam and no mistake 🙄 ) was bad enough.

All SIPPs get an amber flag by default because they offer overseas domiciled investments.  Whether you invest in them or not, the amber flag gets raised.

These badly drafted regs and the equally badly applied CYA approach from some trustees needs sorting out, and fast. I'm just glad I never mentioned all the incentives that I was getting for transferring!

The regs themselves are not bad.   The implementation by retail schemes has been very good.   The implementation of them by auto-enrolment schemes and occupational schemes with professional administrators has been pretty awful.

Tommyjw

dunstonh said:

The regs themselves are not bad.   The implementation by retail schemes has been very good.   The implementation of them by auto-enrolment schemes and occupational schemes with professional administrators has been pretty awful.

Well, they are.

You cant release it and say "eehhh well you see all you need to do is not follow the actual regulation, ignore what it says, basically break the law, add your own subjectivity and flavour to it and do what you think is best" and think the regs arent bad.

CrockettnTubbs

Wow this got more attention than expected, thanks for all your comments. For additional info it's a DC scheme currently worth £15k. Situation update:

• HL sent an email informing they had 'closed the record'
  The exact wording was, "We have received correspondence informing us that they have identified a red flag with your transfer, as you have been offered a cashback incentive from us to make the transfer.  They have informed us that as required under the regulations, for the safety of the members' pension savings, they will not be processing the transfer you have requested at this time.  We have therefore closed this record and will not be taking further action"

• A call to the existing provider was unsuccessful, even after explaining a desire to move somewhere with lower fees. They said since this tripped a red flag they considered the matter closed and they would not move.

I'll try @Marcon suggestion first and contact Moneyhelper.  If that doesn't lead anywhere I'm tempted to try @Pat38493's advice and transfer to a provider not providing cashback just to get the money out.

Marcon

Tommyjw said:

Not sure jumping straight to MoneyHelper helps in any way, that's a step designed for Amber flags that is required to have that further appointment, and serves absolutely no purpose in the designation of something being a red flag.

Red flags are just simply a straight no (unless the scheme decides to treat it with some subjectivity which has its own risks for them)

It might help for the simple reason such an appointment can help to 'change' the mindset of the provider refusing to take the transfer.

coyrls

Tommyjw said:

Pat38493 said:

Tommyjw said:

Not sure jumping straight to MoneyHelper helps in any way, that's a step designed for Amber flags that is required to have that further appointment, and serves absolutely no purpose in the designation of something being a red flag.

Red flags are just simply a straight no (unless the scheme decides to treat it with some subjectivity which has its own risks for them)

I am assuming this DB is worth less than £30K.  So are you saying that the DB provider can use this loophole to block the request completely and nothing can be done about it?

If the OP puts in a transfer request to a provider that isn't offering cashback - will they then say it's a red flag because the inbound provider is offering reduced or no charges for x months as most of them offer at least some kind of incentive like that?

You will probably struggle to find a DIY provider who isn't offering some kind of incentive to transfer in, even if it's just a few months of free platform fees.

(a)

includes an offer of one or more free pension reviews, access to some or all of the member’s pension savings before they attain normal minimum pension age, a savings advance or cashback from their pension savings;

I don't see how HL's incentive is caught by this definition.  HL's incentive payment is not "from their pension savings".  The pension savings are untouched by HL's incentive payment.