The Pensions Ombudsman has cracked down on pension schemes whose service failures resulted in financial loss for certain pensioners.
Three recent decisions issued by pensions ombudsman Tony King and deputy Jane Irvine, the regulator backed consumers over complaints including “financial loss”, a failure to transfer pension proceeds and issues around early release of deferred pension benefits.
In one complaint, a man named as Graham S Jones, who had a defined contribution occupational pension administered by Clerical Medical, decided to transfer his entitlement to a personal pension after being made redundant on 30 March 2001.
Mr King said: “He has suffered financially, by way of additional income tax payable, and furthermore the fact that there was an error, and the difficulty of ascertaining what the correct figure should have been, have caused him significant inconvenience.”
The ombudsman ordered Clerical Medical to pay Mr Jones £10,500 consisting of £8,000 for “financial loss” and £2,500 for “non-financial injustice”.
In a second decision, Thomas Worden, who requested to transfer proceeds of a personal pension policy, originally held under trust, on 24 October 2012, argued that “Phoenix Life refused to acknowledge the efficacy of the deed of termination and therefore wrongly told Standard Life that the plan was subject to a trust”.
Mr King said Mr Worden had “not suffered any financial injustice” but added: “The matter became unnecessarily protracted with Mr Worden trapped between the two providers unwilling to decide whether they could carry out his wishes.”
Standard Life has been ordered to pay Mr Worden £300 and Phoenix Life must pay him £200, within 28 days.
In the local council complaint, a man called Paul Gartland claimed he was “wrongly refused the early release of his deferred pension benefits on grounds of ill health with effect from May 2010” by Durham County Council.
Ms Irvine, deputy pensions ombudsman, said it was “not clear the council made a reasoned decision” and the council should consider Mr Gartland’s application “wholly afresh” and pay him £250 for distress and inconvenience within 14 days.
Right to reply
Phoenix Life declined to comment.
A spokesman for Scottish Widows (on behalf of Clerical Medical) said: “This has been a complicated case involving a number of factors, however we acknowledge we could have provided Mr Jones with a better level of service. We have apologised to Mr Jones and paid compensation.”
A spokesman for Standard Life said they do not comment on individual cases.
Durham County Council declined to comment.
