The High Court is to rule on a suspected pension liberation case this month, which will giving trustees and providers more clarity on their ability to block suspicious transfers.
The Hughes v Royal London case challenges a decision by the Pensions Ombudsman made in June 2015.
Hughes had complained to the Ombudsman that she had been blocked from transferring her Royal London pension pot to the Babbacombe Road 1973 small self-administered scheme.
The complaint was not upheld because the Ombudsman, Anthony Arter, believed Royal London’s concerns about the transfer were legitimate.
Arter ruled Hughes did not have a statutory right to a transfer, and in the absence of a statutory right, Royal London was entitled to decide whether the transfer could be allowed.
The High Court ruling on the case should help to clarify many of the uncertainties surrounding blocked transfers, which make up a large proportion of all liberation legal actions.
Sackers senior associate James Bingham said although this case was a big piece of the jigsaw, it would not solve the scamming problem.
He said: “It will be interesting to see what decision is made and what that means in this case and other cases, but it won’t provide all the answers for pension liberation, unfortunately.
“The people setting these schemes up are ever more sophisticated and things move on very quickly.”
In the past year, the introduction of pension freedom opened the floodgates for liberation cases. The ombudsman’s annual report published in June 2015 stated that pension liberation accounted for 13.8% of all complaints investigated by the Pensions Ombudsman.
However, at an Association of Pension Lawyers talk on 3 December, Arter said that pension liberation accounted for “around 19%” of all cases heard by the ombudsman in 2015.
Linklaters partner Geoff Egerton said: “Given the number which are on hold awaiting that decision, many of these should be resolved this year. This won’t necessarily stop the complaints being made but should make it easier for the Ombudsman or the new adjudicators to take decisions in relation to such cases.”