Key insights into the statutory right to transfer

The Pension Schemes Act 2021 restricts the statutory right to transfer pensions, unless specific conditions are met. Transfers are automatically allowed if they’re to authorised schemes like public sector schemes, master trusts, or collective money purchase schemes; otherwise, due diligence must be done to check for red and amber flags.

Key insights on pension sharing orders

• Most pension scheme members have a statutory right to transfer their pension to another scheme or provider. However, to prevent scams, the Pension Schemes Act 2021 introduced certain conditions.
• The statutory right to transfer remains if the transfer is going to a public sector scheme, an authorised master trust, or an authorised collective money purchase scheme. It also remains for other transfers, as long as due diligence checks are passed.
• Occupational scheme transfers require proof of employment with the sponsoring employer, and overseas transfers need either proof of residency or an employment link.
• Schemes conduct checks for amber flags (e.g. incomplete evidence, unclear investments, or high fees) and require members to attend a MoneyHelper guidance session if concerns arise.
• Red flags (e.g. unregulated advice or unsolicited contact) result in the loss of the statutory right, allowing schemes to block the transfer.
• Trustees must apply due diligence where a statutory right doesn’t exist – even if the member has taken advice. They can request further evidence from members, advisers, or the receiving scheme.

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