General code of practice in force from 28 March 2024

The Pensions Regulator's general code came into force on 28 March 2024¹. The code's section on scams sets out what governing bodies of occupational pension schemes are expected to do to protect members from pension scams, and what the law requires of them¹.

The code states that pension scams can occur when members seek to transfer their benefits to a different arrangement, take early retirement or take their benefits¹. When processing a transfer, governing bodies must check that at least one of the conditions for the transfer to proceed is met, under Regulations 7 and 8 of the Occupational and Personal Pension Schemes (Conditions for Transfer) Regulations 2021¹. When members ask to transfer out, the governing body should carry out due diligence on the receiving scheme to check whether the transfer can legally be paid¹.

Under section 249A of the Pensions Act 2004, governing bodies of certain schemes must establish and operate an effective system of governance, including internal controls, though certain exemptions apply¹. The equivalent provision in Northern Ireland is Article 226A of the Pensions (Northern Ireland) Order 2005¹. The system of governance must be proportionate to the size, nature, scale and complexity of the scheme's activities¹. Under section 249B of the Pensions Act 2004, scheme managers of public service pension schemes must establish and operate internal controls adequate to secure that the scheme is administered and managed in accordance with the scheme rules and the requirements of the law¹.

The code says governing bodies should be aware of the warning signs of a scam and consider whether any are present when dealing with member requests to transfer or take benefits¹. They should take steps to ensure members are aware of the risks of pension scams, which may include providing clear information on how to spot a scam in all relevant communications, including the retirement wake-up pack and annual benefit statements, and placing scams warning messages on the scheme's website¹. Governing bodies can also pledge to do more to combat scams and follow the principles of The Pension Scams Industry Group's "Combating Pensions Scams, A Code of Good Practice"¹.

Why it matters for households

The code places duties on the bodies that run workplace pension schemes, not on members directly, so the practical effect for households is on how schemes handle requests to transfer or access pension benefits. From 28 March 2024, governing bodies are expected to treat scam risk as part of their internal controls, to check the receiving scheme before a transfer is paid, and to make members aware of scam risks through standard communications such as the retirement wake-up pack and annual benefit statements¹. Members of public service pension schemes are covered by separate internal control requirements under section 249B¹. The code notes that certain schemes are exempt from the section 249A governance duty, and that governance must be proportionate to the scheme's size, nature, scale and complexity¹. The scams section does not set out new rights for individuals to claim compensation, and no figures for scam losses or transfer volumes are given in it¹.

What happens next

The general code is in force from 28 March 2024¹. The scams section refers governing bodies to the Regulator's separate guidance on transfers out, systems of governance and internal controls, and to its pledge to combat pension scams¹. No further dates are given in the scams section¹.

Households can read more about how workplace pensions are supervised by The Pensions Regulator, about pensions generally, and about free guidance on pension options from Pension Wise.