Pensions  

Friends ordered to pay redress over year-long Sipp transfer

Friends Life has been ordered by the Pensions Ombudsman to pay an investor compensation after it took a year to complete processing of a transfer of self-invested pension assets to another provider.

In a decision dated 14 June, pensions ombudsman Tony King partly upheld a complaint against Friends Life, stating that blame would also fall partly on the nominee of the Sipp, Bank of New York, which is not within the ombudsman’s jurisdiction.

Mr King said Friends Life specifically could have been more “proactive” in obtaining required information and should have escalated the issue within the BNY “at a much earlier stage”, after it took a year to complete the transfer of a range of investments to Tenon Financial Services.

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In early December 2009, investor Mr Spicer asked Friends to transfer his Sipp to Tenon. His assets were made up of investments in the Jupiter Income Trust, Schroder Income Fund, Witan Investment Trust, Royal Bank of Scotland Capital Cash account, M&G Pan European Income Shares, Gartmore UK Index Retail and the Dartmore Investment Trust plc.

Mr Spicer wished for the transfer to take place prior to 23 December 2009 as the annual management charge was due on this date.

On 24 December that year, Friends emailed Tenon, attaching a list of the assets to be transferred, to which Tenon responded on 4 January 2010. According to the decision, this email was not picked up and it was not until 8 February that this oversight was identified.

Friends instructed Bank of New York to transfer the assets on 10 February, however there were issues with the Dartmore Investment Trust investment as BNY queried whether the fund was in liquidation.

The transfers of all assets were completed by the end of March with the exception of the Witan Investment Trust and Dartmore Investment Trust assets. The Witan asset was eventually passed to Tenon in June 2010, but despite several attempts to expedite the process it took until 13 December 2010 for the Dartmore asset to be transferred.

Mr Spicer had made a complaint to Friends Life as the Sipp’s annual renewal payment of £340 and a fund management charge of £80.17 had been deducted from his account. Mr Spicer subsequently also raised concerns that an income withdrawal fee of £151 had been taken.

Mr Spicer requested that all charges should be reimbursed. Friends Life agreed to refund the income withdrawal fee, agreeing that it was likely the transfer would have been completed earlier had it not been for their initial delays, which Mr Spicer accepted.

The firm also offered £50 for distress caused, later upping this offer to £125. Mr Spicer rejected both and pursued his complaint with the ombudsman.

The ombudsman ruled that Friends Life should pay Mr Spicer £200 for inconvenience suffered, in addition to the £151 that Mr Spicer already accepted.