Work and Pensions Committee to examine impact of pension freedoms and protecting pension savers – News from Parliament – UK Parliament

We have been skeptical and critical of the shift from defined benefit to defined contribution pension plans. The entire idea of pension plans was to protect the retirement income security of working people by having their savings managed by expert professionals subject to the highest requirements of diligence and loyalty. What has been characterized as “freedom” and “choice” for employees has too often been thinly disguised excuses for abdication of responsibility and imposition of additional fees. This became an even more serious problem as investment firms pushed to be allowed to promote their own products when acting as advisors. Now the UK is investigating “pension scams,” an inquiry that could be called for in other countries, including the US.

Pension savings are often people’s single largest financial asset. The high value and fact that people often do not have to engage with their savings until much later in life makes them an attractive target for fraudsters.

The Financial Conduct Authority (FCA) and The Pensions Regulator say that 180 people reported to Action Fraud that they had been the victim of a pension scam in 2018, losing on average £82,000 each. They also believe that only a minority of pension scams are ever reported.

Last month, the Committee’s report, DWP’s response to the coronavirus outbreak, committed to undertake detailed work on pension scams.

via Work and Pensions Committee to examine impact of pension freedoms and protecting pension savers – News from Parliament – UK Parliament

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