RegulationJan 29 2015

Ombudsman warns of claims over unblocked pension transfers

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Ombudsman warns of claims over unblocked pension transfers

Pension liberation transfer claims are set to ramp up, especially in relation to transfers which took place and which providers could have blocked as statutory right to transfer rules may not have applied, according to the Pensions Ombudsman.

In an online update, ombudsman Tony King states claims may rise “in light” of the recently published landmark pension liberation decisions, which backed providers over blocked transfers and emphasised a strict interpretation of transfer rights.

Mr King also asks individuals to stop submitting complaints about one suspected pension liberator in particular, on which a decision will be published in the first half of this year.

Earlier this month the ombudsman released its first wave of pension liberation decisions, which backed several pension providers which blocked switches. However, the ombudsman was critical of the providers’ processes and particularly of ignorance of the right to transfer rules.

Mr King emphasised in the rulings that individuals have a right to transfer within six months, but pointed to exemptions which, for example, do not require an occupational pension provider to process a request to move to a non-workplace receiving scheme.

On the rise in claims in the latest update, he says in particular complaints may be about transfers to the Capita Oak Pension Scheme. The scheme is a self-storage firm in the north of England.

The statement said: “We are presently investigating one complaint of that kind. We expect to publish our decision in the first half of this year. It won’t be binding on anyone except the parties to it, but it will give a good indication of our general approach.

“Before that case is published there is no need to make your own application to us about the same or similar issues. If you did we would have to ‘park’ your case until the first case is decided – and then we would probably ask you and/or the transferring scheme to look at your case again.”

One decision has already been published related to the scheme. In December, FTAdviser reported an upheld complaint after Capita Oak failed itself to comply with a transfer request.

In the ruling Mr King 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. The consumer was not complaining about the initial transfer from his NHS Scotland scheme.

The ombudsman added: “If it does become necessary for you to complain to us, the time from now until the first case is published will not count against you for the purpose of deciding whether your complaint has been made within our time limit.

“That would usually be three years from when the transfer was made, but potentially longer than that where the delay was reasonable.”

peter.walker@ft.com, donia.o’loughlin@ft.com