Measures announced by the Government in its response to its consultation on pension scams published today will have major implications for SSASs.

Key points announced are:

  • All new pension schemes will have to have an active company as sponsoring employer in order to be registered "except in legitimate circumstances" where HMRC will have discretion to register a scheme with a dormant sponsoring employer.
  • The requirement for a scheme to have a non-dormant sponsoring employer will also apply to existing schemes "registered with a dormant sponsoring employer" with HMRC having a discretion not to de-register a scheme "in legitimate circumstances". Legislation to implement this change will be introduced in 2017.
  • The statutory right to a transfer value will be limited to transfers to personal pension schemes, authorised master trusts, certain overseas schemes and schemes where members can provide evidence of an "employment link" with the receiving scheme. Details of the "employment link" test have yet to be worked out. The Government intends to align the transfer rules changes with the roll out of the master trust authorisation regime in late 2018/2019.
  • Transfers in other "legitimate" circumstances will still be allowed on a discretionary basis, and the Government may introduce a power for schemes to amend their rules if they do not currently allow transfers where there is no statutory right.
  • The Government is considering introducing new legal requirements regarding the need for schemes to make due diligence checks before making a transfer.
  • A broad ban on making cold calls in relation to pensions will be introduced "when Parliamentary time allows", with the Information Commissioner's Office able to levy fines of up to £500,000 for breaches.


Although the cold calling ban is the measure that has received most media attention, the planned changes to the rules on transfer values and the rules on non-dormant employers are likely to be of much greater concern to most SSAS providers, particularly the potential for existing SSASs to be de-registered if they are "registered with a dormant sponsoring employer". The consultation response is particularly light on detail here. It is not clear whether de-registration will only be a risk for schemes that had a dormant sponsoring employer at the point of registration, or whether it could also apply if a scheme's sponsoring employer becomes dormant after registration, or the principal employer is changed from a non-dormant to a dormant company.

Jade Murray

Jade Murray

Partner, Pensions
United Kingdom

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