The Pensions Regulator has warned that pensions are at a greater risk of fraud, dishonesty and risky behaviour by employers who want to make savings during the recession.

The body has called on employees, trustees and pensions professionals to act as whistleblowers if they become suspicious that employers are not fulfilling their pension obligations.

“Employees and pension scheme members should report any concerns to trustees, whose duty it is to protect their interests. Trustees should contact us,” the regulator said.

“The whistleblowing duty overrides any other duties a reporter may have – such as confidentiality – and any such duty is not breached by making a report,” it added.

The regulator added that while the majority of pension schemes were run by “dedicated and hardworking individuals”, the risk of fraud and dishonesty “is nonetheless real”.

Tony Hobman, chief executive of the Pensions Regulator said he was particularly keen for whistleblowers to report any unacceptable behaviour.

“The economic downturn may accentuate the vulnerability of some schemes to certain actions which give us cause for concern,” he said.

“We encourage all those who might be aware of behaviour that would give cause for concern to contact us,” he added.

The warning, which has been sent to all pension schemes, cites potential examples of risky behaviour by employers. These include “avoidance of employer debt, inappropriate transfers for individuals from under-funded schemes that would not subsequently have the resources or adequate employer support, as well as employer-related self-investment and poor practice associated with transfer incentive exercises.”

The regulator also warns that “scheme members may be targeted to access their pension assets through trust-busting or pension liberation activities.”

The TUC has welcomed the regulator’s alert. “This is a helpful reminder that those involved in running pensions should remain alert to the potential for rare cases of fraud or dishonesty that could jeopardise members’ benefits,” said assistant general secretary Kay Carberry.

This entry was posted on Monday, April 20th, 2009 at 10:09 am and is filed under Retirement, Savings, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.