Pensions Liberation: Would You Recognise It?

The controversial subject of pensions liberation (i.e. members unlocking their pension fund before minimum retirement age) remains a hot topic for the Regulator and the pensions industry at large. Whilst it is not itself illegal, it does give rise to large tax liabilities which may significantly reduce the member's pension pot; the potential for fraud occurs where the "liberator" fails to fully disclose the tax consequences, the fees payable, or the effect on the member's remaining pension pot. The Regulator published guidance in relation to pensions liberation earlier this year (please click here). Trustees should ensure that schemes have sufficient internal controls to identify pensions liberation, and may wish to discuss this with their professional advisers.