A pension scheme administrator which has been indirectly accused of so-called ‘pension liberation’ has vowed to continue to push for a transfer on behalf of a prospective client currently in an Aviva personal pension, despite losing a ruling with the Pension Ombudsman.
In a show of defiance which underlines the difficulties providers face, the SCCL scheme has seized on the prominence afforded to the statutory right to transfer in three landmark complaint decisions and told FTAdviser the provider would ”not be able to turn us down”.
Despite criticising the life company for not investigating the legislative position and poor communication, ombudsman Tony King rejected the complaint from Sharon Jerrard, who had been blocked from transferring her £5,369 fund to the SCCL Pension Scheme.
Aviva cited suspicions the scheme was involved in pension liberation and said it had blocked two previous attempts by the member to transfer to other liberators, which would have given rise to unauthorised tax charges of 55 per cent.
Mr King said there was no statutory right to transfer in this case as occupational pension rules only oblige a scheme to process a request if the receiving scheme is also a bona fide workplace pension.
According to a statement put out by Warwick and Eaton, which administers the SCCL scheme, the decision was based on the fact that there was not a ‘deed of participation’ between the member’s employer and the scheme at the time of the initial request.
In November 2014, almost two years after Ms Jerrard applied to Aviva for a transfer to the SCCL Scheme, a deed of participation was entered into.
The ombudsman stated members must be or have been employed by SCCL as the principal employer, or a ‘deed of participation’ would need to have been in place. It added occupational schemes must include descriptions “from which employments can be identified”.
Speaking to FTAdviser, Simon Walker, director at Warwick and Eaton, said: “We understand that the scheme rules and trust deeds should be amended to reflect ‘employments of a description’ and that in doing so then there should be no objection when combined with the deed of participation.”
Whether this will be enough is unclear, however, as Mr King also highlighted a number of specific concerns which may continue to give Aviva grounds to refuse.
He noted: “Ms Jerrard is described as self-employed, which is not consistent with the purpose of the document.
“I make no finding about whether the deed was effective in any sense, and note that even if it had been, it leaves unaffected my finding that the SCCL Scheme is not an occupational pension scheme.”
A spokesperson for Aviva told FTAdviser: “We consider all transfers on a case-by-case basis. Our objective is always to protect customers’ investments for their retirement by following a robust process.”
Adrian Boulding, pensions strategy director at Legal and General, said he was encouraged by the fact the decisions generally stated a customer’s “statutory right to take their money away from their existing pension provider is dependent upon them having a proper pension scheme to transfer it to”.
Warwick and Eaton said in a statement: “Bearing in mind that this determination is, based on the misconception that there is not a deed of participation, and therefore the relationship with the employer is undefined, a fresh application for the member will be submitted within days.
“We are getting tarred with a ‘pension liberation’ brush as we are fairly new, launched in 2013 and people who join are not geographically related.”
donia.o’loughlin@ft.com
