The ACA said the amber flags, which focus on investment and charges, appear to be harder to operate than the red flags as they are much more dependent on interpretation.
ACA pension schemes committee chair, Peter Williams, added: “Guidance will be essential and even with comprehensive guidance trustees could be put to a lot of work in order to decide whether or not an amber flag exists.
“There is also a clear risk that the meaning of the various amber terms varies over time.
“We wonder whether a more streamlined mechanism can be made available under which trustees can require the member to take guidance, rather than have to reach a judgment as to whether or not an amber flag exists.”
Last year, proposals to give trustees the power to halt pension transfers where a scam is suspected gained support from advisers, despite some scepticism over the practicality of implementing them.
Keith Richards, chief executive officer of the Personal Finance Society said the amendment to the Pension Schemes Bill, which seeks to remove people's statutory right to transfer where a scam is suspected, was a positive move.
But he warned it must not stop legitimate transfers from taking place.
sonia.rach@ft.com
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