DC Pension transfer issue due to DWP rule

dunstonh

Tommyjw said:

dunstonh said:

 The administrators of the existing pension are telling me that, because some of the Aviva pension funds are invested outside the UK, I must have a call with MoneyHelper

Its a very common issue with pension schemes that have little or nothing on their green lists.    
The worst offenders are some of the professional administrators used with large schemes, Legal and General and Aegon.

They say DWP think any overseas investment may be a scam. 4 weeks queue for this call.

That is not what the DWP think.  It is what the scheme think.   The DWP allows discretion to be applied and for providers and funds to be added to green lists.   However, it leaves it to the schemes to apply the discretions.

There have been calls for the DWP to fix it but in reality, it is the schemes themselves that are responsible as the existing rules allow it. 

I have two held up at the moment because of this.  With one of them, Legal & General think Vanguard funds are a scam.

The DWP doesn't allow discretion, the regulations are written very clearly. "There are any overseas investments included in the receiving scheme; " is the exact wording, nothing more, nothing less, there is no discretion.

Discretion is allowed.  There was further guidence issued by the pensions regulator and DWP in July 2022 to allow green list creation.

The methodology places the decision making and due diligence with the ceding scheme.  Indeed, it says:

You should be aware that no single piece of basic due diligence can definitively rule out the risk of a pension scam. Make your decision using the evidence from all the checks you carry out.
<snip>
After carrying out such due diligence, you may conclude that while a red or amber flag might be triggered, the risk to the member is still low. Where your scheme rules allow, you may still grant a non-statutory transfer. Our expectation is that trustees will carry out enough due diligence on a non-statutory transfer to be confident that they have fulfilled their fiduciary duties to the transferring member.


 Providers will have green lists for funds and providers that allows them use their discretion to not issue a form for extra details or not require a moneyhelper meeting.

So, lets say you transfer from Standard Life to an Aviva SIPP.     The SIPP will, by default, report it can have overseas investments.   You are saying the providers have no discretion but the reality is that Standard Life will not issue the form and will not require the moneyhelper meeting as they will have Aviva on their green list and will transfer it within days.

Now, if you were transferring to a non-mainstream provider SIPP that is well known for holding illiquid unregulated assets, then that is highly unlikely to be placed on the green list.

DancingQueenHerself

Thanks all for your input. I did book the call with MoneyHelper straightaway. Do I have to be careful what I say on the call? Aviva will have UK only funds and I could just mention one of those?

As for risks, a pension fund by definition carries risk. Madness to think risk can be avoided.

DancingQueenHerself

Unfortunately I have to go through the administrators that the trustees from my old employers have put in place. They prevent me from dealing direct with Standard Life.

NoMore

DancingQueenHerself said:

Thanks all for your input. I did book the call with MoneyHelper straightaway. Do I have to be careful what I say on the call? Aviva will have UK only funds and I could just mention one of those?

As for risks, a pension fund by definition carries risk. Madness to think risk can be avoided.

I would just answer the questions truthfully, if the you are seen as being evasive then that's not going to help them green light any transfer.