Administration failings push pension complaints up 10%

According to figures published today (1 July), in the year ending 31 March 2009 TPAS dealt with a total of 7,746 complaints, compared with 7,026 in the previous 12 months.

According to TPAS' annual review, the biggest single cause of the rise in complaints was down to poor administration, with increases in both delays and mistakes contributing heavily to the figures.

Most of the complaints concerned individual pension plans, while complaints against occupational schemes actually fell by 2 per cent compared with the previous year.

Overall, the number of complaints about poor administration rose by 59 per cent. In total, maladministration accounted for 44 per cent of all complaints, compared with 31 per cent last year.

Maladministration complaints against occupational schemes rose by 26 per cent and against providers of individual plans by 58 per cent.

Nearly two thirds (60 per cent) of all complaints about individual policies were about poor administration.

Malcolm McLean, chief executive at TPAS, blamed the tough economic conditions in the second half of the year for exacerbating the problem.

"There was undoubtedly a 'double-whammy' effect. Many savers had experienced significant reductions in the value of their pension savings from continuing stock market falls and delays in obtaining an annuity quote or award often meant a further reduction in the pension eventually secured."

A significant proportion of the complaints about delay reflected administrative malfunctions following insurance company mergers and takeovers.

According to TPAS, problems in integrating systems after a takeover frequently cause delays in the payment of pension benefits and in responding to requests from policy holders.

Elsewhere, general errors and mistakes were a source of discontent for many individuals.

For example, some of these mistakes resulted in actual financial loss when expenditure or commitments had been entered into in the belief that a pension award or lump sum was correct when, as it later transpired, it was not.

In these instances, it was sometimes possible, with TPAS's help, to obtain compensation and/or a write-off of an overpayment, where it could be shown that the individual had relied or acted on the incorrect information to their financial detriment.

Meanwhile, the number of general enquiries TPAS received from the public continued to rise over the year, with 75,000 calls dealt with on the helpline on top of the 12,500 written enquiries received by email or post.

In total, including website visits, nearly 750,000 people used the TPAS service during the year.

A particular feature of the year was the increasing number of questions about the security of pension schemes and pension providers.