Pension Liberation: Combating The Infiltration

In our July 2013 e-bulletin we discussed whether we were becoming a Liberation Nation. It's a new year but how have things changed in relation to the dangerous practice of releasing funds from occupational pension schemes using unauthorised arrangements.

What is pension liberation?

Pension liberation is a practice which has been causing great concern within the pensions industry.  Rogue funds tempt members to transfer their pension benefits with the promise that after doing so the individual will be able to circumvent many of the restrictions placed on taking their benefits, for example they may be promised access to their benefits before attaining age 55.  Under the Finance Act 2004 such a payment would generally be an unauthorised payment.  The consequence of an unauthorised payment is an unauthorised payment charge of up to 55% although this is often not disclosed to the individual before they decide to transfer their benefits.