Ombudsman to publish blocked liberation decisions in January
The Pensions Ombudsman is set to publish a group of long-awaited pension liberation decisions in the new year.
In the week of the 6 January, the ombudsman will publish a group of cases about people who wanted to transfer out, but whose transfers have been “blocked” by their pension schemes.
Complaints regarding liberation are generally either about life companies and providers not complying with transfer requests on the grounds that it could be a pension liberation vehicle, or in some cases that they have allowed such a switch without sufficient checks.
In December this year, the Pensions Ombudsman published the first of the pension liberation cases.
Pension ombudsman Tony King upheld a complaint against a pension liberation firm for failing to comply with a transfer request, but warned the claimant may need to take legal action to attempt to recover his fund of around £350,000 initially switched from a final salary scheme.
In what is an exceptional case compared to a number of others sitting with the ombudsman, the consumer is not complaining about the initial transfer from his NHS Scotland scheme to the liberator, Capita Oak, but rather about the latter’s failure to respond to a subsequent transfer out request.
Mr King said: “We directed the trustee to pay a transfer value of at least the original amount, plus interest. Mr X can enforce the direction in the courts, though the ombudsman noted that even if the trustee engaged with enforcement, Mr X might find that some or all of the money had disappeared.
“The case published...shows how dangerous it can be to take advice to transfer to an unorthodox pension scheme on the promise of more freedom and high returns. The blameless scheme member may well have been duped out of a very significant amount of money representing his entire pension.”
Mr King added: “Anyone who is approached by an unregulated adviser recommending they transfer to a pension scheme of which they have never been a member should act with extreme caution. The adviser is unlikely to have their best interests at heart, and may be a fraudster.”
ruth.gillbe@ft.com
