The Pensions Ombudsman has ruled against Towers Watson and Fidelity for “needless delays” in effecting a pension transfer and has ordered the pair to pay the cost of backdating self invested pension investments as well as each paying £100 as compensation.
Complainant Daniel Long suffered a financial loss as a consequence of Fidelity and Towers Watson dragging their heels in transferring the pension rights available to him from the BPSS Pension Scheme into a Sipp.
The Sipp is administered by Standard Life on behalf of Fidelity. It was established in November 2012 by Mr Long in order to receive the transfer value available to him from his pension scheme.
On 30 November 2012, Standard Life sent a letter to Towers Watson, the administrators of the BPSS scheme, requesting the current transfer value available to Mr Long be paid by Bacs into their bank account held with HSBC.
However, Towers Watson paid the transfer value available to Mr Long of £48,790 to Standard Life on 20 December 2012 by Chaps instead of by Bacs. A different reference number from the one Standard Life requested them to use was also given.
Towers Watson sent a letter to Standard Life on 20 December stating the transfer value would be paid direct into their bank account “within the next few days”, however Standard Life chased Towers Watson on 8 January 2013 for payment.
The administrator replied that payment had already been made and provided Standard Life with relevant details so that they could trace it. However, the payment was returned in January and once Towers Watson realised, the transfer value was again paid by Chaps to Standard Life.
On 22 January, Mr Long instructed Fidelity to invest £12,000 in each of the China Consumer Fund, China Focus Fund, Emerging Asia Fund and the Emerging Europe, Middle East and Africa Fund. Fidelity processed this request on 23 January 2013 at the next available dealing point.
According to pensions ombudsman Tony King, Fidelity accepted that it was partly responsible for the delay to Mr Long’s transfer of pension rights.
They conceded they had an opportunity to chase Towers Watson for the transfer payment on 8 January and if they had taken it, would probably have received the payment on the same day.
Fidelity told the ombudsman that as a result they are willing to “best price” the transfer assuming payment was received on 8 January and £12,000 invested in each of the four funds chosen by Mr Long at the next available dealing point of 10 January.
The ombudsman supported their proposal to Mr Long as “an equitable and reasonable response for the delays attributed to them after 8 January”.
The ombudsman ruled the failure of Towers Watson to ensure that Standard Life could allocate the transfer payment on 21 December was the main reason for the transfer delay prior to 8 January.