Pensions Ombudsman Tony King has ruled in favour of pension scheme operators Legal and General and Scottish Widows over complaints from one saver who transferred a total of more than £52,000 into a scheme under investigation in relation to pension ‘liberation’ allegations.
In two separate decision notices, published today (23 April), Mr King states that while he has great sympathy for the position Joseph Winning now finds himself in, he did not consider that there was an administrative failure by the providers.
Mr Winning had complained that both transferred his personal pension without sufficient checks on the receiving scheme. He told the ombudsman he is now unable to locate his pension fund.
Mr Winning said he would not have transferred his pension fund if Scottish Widows had brought the facts about pension liberation to his attention and had HM Revenue and Customs not ‘registered’ the Capita Oak Pension Scheme.
Imperial Trustees, which operates the scheme, wrote to Mr Winning in December 2012 confirming a transfer of £42,273 from his Legal and General fund and £10,128 from his Scottish Widows fund. Initial fees of 5 per cent, totalling £2,620, were deducated.
As in a number of previous cases in relation to Aviva and Zurich in relation to occupational schemes and Standard Life over a self-invested pension transfer, Mr King holds that the statutory right to transfer would override most other considerations.
In those cases the ombudsman had also backed providers despite them having blocked transfers, citing in particular workplace pension regulations stating what should be considered a legitimate receiving scheme.
However, he had previously criticised those providers over due diligence and checks undertaken and emphasised the right to transfer should by default be paramount.
In the latest decision Mr King highlights that the Pension Regulator did not issue guidance to providers about pension liberation until February 2013, “which could be regarded as a point of change in what might be regarded as good industry practice”.
These decisions have been expected for some time, with campaigners lobbying on behalf of those who transferred to the unregulated pension scheme being frustrated with a perceived regulatory hold-up.
Earlier this month, HMRC told savers in the Capita Oak scheme that it would not relent on its position and would continue to apply penalty taxes. The tax watchdog is investigating pension liberation allegations but has not reached a decision.
In both decisions, Mr King mentions Mr Winning received a letter in October 2014 from an accountant named Mr Downs, who had been asked by one of the directors of Imperial to conduct enquiries into Capita Oak because “there had been a lot of bad publicity”.
These enquiries, he notes, indicated that Mr Winning’s pension fund was invested in storage pods with Store First. The decision explains Mr Downs said he had “no reason to believe that anything untoward” had happened to Mr Winning’s investment, but would report further in due course.
“However, there has been no further news and Mr Winning remains extremely concerned about his pension fund.”
Mr King states even if he was right that the providers should have carried out greater due diligence, that would not necessarily lead to the reinstatement of his benefits.
“It is possible, though I have not needed to consider the point, that even if he had been warned that transferring was an unusual and/or risky step, he would have persisted.
“Indeed, Mr Winning says that the main reason he transferred was that he considered the Capita Oak Pension Scheme must be legitimate because it had been registered with HMRC.”
He adds: “Given the current publicity both about pension liberation generally and certain schemes in particular, it is natural that Mr Winning feels upset about what has happened in his case.
“But I cannot apply current levels of knowledge and understanding of pension liberation/scams or present standards of practice to a past situation.”
peter.walker@ft.com
