Mr R (PO – 24554) (No maladministration where transfer finalised within one month of publication of Scorpion guidance)

TPO has rejected a complaint that Aegon did not carry out appropriate due diligence when transferring a pension fund to a Small Self-Administered Scheme (“SSAS”).

In giving its determination, TPO discussed the issue of timeframes within which schemes should reasonably be expected to institute new processes following the publication of key guidance on identifying and preventing scams.


Mr R was a member of a group personal pension. On 25 January 2013, he requested a transfer to a SSAS administered by Greenchurch Capital Ltd (“Greenchurch”). Greenchurch wrote to Aegon to accept the transfer on 12 February 2013, noting (on 13 February) that they had recently submitted their registration application to HMRC and awaited confirmation.

On 14 February 2013, TPR published guidance on “pension liberation fraud”, since referred to as the “Scorpion guidance”. This contained a checklist of activities characteristic of fraud attempts, along with suggestions of the due diligence enquiries schemes should make.

Mr R’s transfer payment was made to Greenchurch on 15 February 2013, but then returned to Aegon following an administrative error. The payment was remade on 19 March 2013.

Four years later, in April 2017, Mr R’s representative wrote to Aegon to complain that on a number of grounds (including that of insufficient due diligence), Aegon should not have allowed the transfer to take place. Aegon did not accept responsibility, and Mr R brought his complaint to TPO.

In making their case, Aegon noted that TPO had considered several complaints relating to due diligence performed by providers and administrators around the time of TPR’s February 2013 publication. In short, the publication of the guidance marked a point of change, but TPO had held that it was reasonable for schemes to have a short period within which to consider and implement processes reflecting TPR’s recommendations. Aegon cited various cases where TPO had considered a three-month period for implementing the changes to be a reasonable timeframe. Mr R’s transfer was already being processed at the time TPR’s announcement was made, and temporarily suspending transfers to give Aegon time to review its literature and processes would have resulted in many delays to transfers and changes to transfer values.

TPO’s decision

TPO noted that the March transfer (ie following the monies being returned due to the administrative error) was the effective date of the transfer, at which point, the Scorpion literature had been out for a month. However, TPO considered that even had Aegon complied with the new guidance, and possibly flagged some matters as concerns, TPO found the transfer could not have been refused, as there was no indication that Mr R did not have a statutory right (following the Hughes case).

Whilst Aegon was right to note that TPO had previously held that “a period of time” to amend procedures following TPR’s guidance was permitted, TPO reminds us that it is not bound by its earlier Determinations. Following “evaluation” of earlier cases and the “evolving regulatory position”, TPO now states that it considers “a period of approximately one month” to generally be sufficient for new processes to be put in place. If this timeframe cannot be met, TPO would expect a provider “to consider temporarily suspending transfers while it makes the necessary arrangements” or contacting TPR to request transfer extensions. TPR’s Scorpion guidance marked a “point of greater vigilance”, and had been flagged to pension professionals as expected. The lack of permitted lead-in time from TPR also showed “urgency was clearly required and expected”.

In Aegon’s case, remaking the payment in March was “essentially an administrative action”, and no new information had come to light since the February transfer to raise any concerns. The final payment was made one month and five days after TPR’s guidance was issued, and “in the circumstances”, it was not reasonable to have expected Aegon to have updated its process and then revisited this particular transfer at the last stage of its journey. Aegon’s due diligence was therefore undertaken in accordance with expectations at that time. Aegon was not negligent in allowing the transfer, and the complaint was dismissed.


The decision is a useful reminder that TPO need not follow its own earlier Determinations. Here, although it is repeated that each case is of course assessed on its own facts, TPO seems to have taken a significant step away from previous conclusions.

TPO’s move to a one-month period may encourage members (and claims companies) to re-focus on complaints relating to transfers between March and May 2013, which previously may have been considered outside the “Scorpion” due diligence requirements.  In addition, schemes will need to ensure they react promptly to any other key changes to guidance in this area.

We would expect to see this Determination reflected in the further update to Pensions Scams Industry Group (“PSIG”) code of good practice on combating pension scams expected after the Summer (see 7 Days).

And, whilst in this case, the member had a statutory right to transfer, we are of course awaiting changes to the relevant legislation to further protect members, following the passing of the Pension Schemes Act 2021 (see our recent Alert).