Pensions consultancy reports huge increase in pension scheme fraud

The annual report, from consultants Baker Tilly, recorded a 55% increase in pension schemes reporting fraudulent activity. Of the survey respondents 19% said they had experienced cases of fraud, compared to 12% of respondents in 2011. “Awareness of the issue may be rising against a backdrop of more pension frauds hitting the headlines, including high-profile investigations involving illegal cash transfers, false schemes, money laundering and bribery allegations,” it said. The accuracy of member data was considered the most vulnerable area for fraud by the survey’s respondents. Most of the reported incidences of pension scheme fraud came from larger schemes with more than 10,000 members, Baker Tilly said. These schemes accounted for 70% of reported fraud cases despite making up only 31% of respondents. However, the report acknowledged that larger schemes were more likely to identify problems due to “stricter governance frameworks”. Pensions law expert Simon Tyler of Pinsent Masons, the law firm behind Out-Law.com, said that it was a "sad fact of life" that fraud levels tended to increase during times of economic stress. However, he noted that the report had highlighted an increase in more serious types of fraud. "Most pension schemes will have come across a spouse 'forgetting' to report a pensioner's death,