Sipps Pro is delighted to welcome Neil MacGillivray, chairman of the Association of Member-directed Pension Schemes, as our latest blogger.
Mr MacGillivray, also head of technical support at James Hay Partnership, will regularly be writing for the website and in his first article below, he explores the latest on pension liberation.


A subject, in various guises, that took up a lot of time at the AMPS Annual Conferences was pension liberation. This is of no real surprise given the Pensions Regulator's (TPR) recent estimate that £600m to £800m has been transferred to such schemes, though perhaps of greater concern is this may only be the tip of the iceberg, with the actual amounts likely to be considerably higher.
The first point to clarify is that the liberation of a pension fund in itself is not illegal. A member of a pension scheme, providing the rules of the scheme allow, could access their pension fund in full and as long as the individual and scheme administrator paid the appropriate tax charges, there would not be an issue.
What makes liberation fraud, is where the member is misled. The Pension Advisory Service (TPAS) informed AMPS that currently 2% of their calls are with respect to pension liberation. TPAS has evidence that the majority of members are clearly being misled and subject to high pressure sales techniques. There are of course some members who are fully aware of what they are entering into, but these appear to be in the minority.
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There has been significant coverage of what government bodies are doing to tackle this problem; these include HMRC tightening up on registration of new schemes as well as getting new powers in the Finance Bill 2014 to de-register schemes, and both TPR's Scorpion Campaign and the National Crime Agency targeting the promoters of pension liberation schemes. The pensions industry is fully in support of all these actions and is taking additional measures.
One controversial move is the refusal to transfer a pension where liberation is suspected. A member has a statutory right to transfer their pension to another valid scheme; if the transfer is delayed then TPR can impose fines on the ceding scheme. There are 41 cases currently with the Pension Ombudsmen awaiting a decision relating to delays on pension transfers. Pension providers are therefore caught between a rock and a hard place when it comes to deciding whether or not to allow a transfer.
At the conference there was guidance given as to how to approach requests to transfer, and when it should be reasonably safe to refuse. The newly formed Pension Liberation Industry Group is also in the process of preparing an industry wide 'Code of Practice' which should help bring more clarity.
There is no doubt that the relaxation of how members access their pension post April 2015, in addition to the possibility of a reduction in the 55% special lump sum death benefit charge, pension liberation for many may look less attractive. However it is envisaged there may still be demand for those under the minimum retirement age.
One only hopes that with the steps being taken by both government bodies and the pensions industry we will see the demise of pension liberation.