RegulationMay 26 2015

Ombudsman orders transfer in latest liberation ruling

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Ombudsman orders transfer in latest liberation ruling

The Pensions Ombudsman has upheld a complaint against a suspected pension liberation firm for failing to comply with a transfer request, ordering a transfer of the pension to a named occupational scheme.

Mark Crossland complained to the ombudsman that scheme operator Omni refused to transfer his benefits out of the Henley Retirement Benefit Scheme. The scheme, which the regulator said is connected with so-called ‘pension liberation’, told the ombudsman it was currently facing liquidity problems.

In early 2013, Mr Crossland transferred £52,463 from his Scottish Widows pension and a further £48,246 from Wesleyan Assurance. An ‘opening unit statement’ dated 21 February 2013 showed receipt of both payments by Omni, with charges of £1,800 being applied.

Mr Crossland received correspondence from Omni in March 2013 stating that DBC Pension Services Ltd had been appointed as the scheme administrator, but by September a second letter stated that the scheme is managed by Omni Trustees Limited.

On 3 March 2014, Mr Crossland wrote to Omni, as well as the ombudsman, to summarise his concerns and to request a transfer value. Following this, he tried to contact Omni on multiple occasions.

Mr Crossland also told the ombudsman that he had been unable to obtain any information about his pension for over 12 months.

Upon request for Omni’s submission by the ombudsman, the firm emailed the ombudsman and Mr Crossland stating that it remained the scheme administrator, but admitting service had been “affected by a number of administration problems and disruptions over the last 12 months”.

Scheme assets were said to be currently invested in commercial property and due to a number of member requests to take benefits, a sale of a commercial property was requested by the trustees “to create sufficient liquidity in the fund”.

Omni said the sale had yet to be completed, but was imminent. Once completed, they would be in a position to honour all outstanding member requests, including transfer values, pension commencement lump sums and death claims.

Separately, in November 2014, a company called Timoran Capital Trust wrote to Mr Crossland, stating it was the trustee of the Timoran Capital Ssas, which had received a transfer of assets of the Henley Scheme from Omni on 24 July.

However, it had “quickly become apparent” that some assets had not been transferred and a report was said to have been made to The Pensions Regulator.

Tony King, the pensions ombudsman, wrote: “Why such a transfer was made, if at all, and whether it involved Mr Crossland’s pension fund is unclear,” adding that Omni had not updated Mr Crossland about this “claimed transfer”.

Mr King ruled that within 14 days of Mr Crossland requesting a transfer value to a named scheme that meets the prescribed requirements under legislation and is prepared to accept it, Omni are to pay the transfer value to that arrangement.

However, the decision added: “I strongly recommend to Mr Crossland that his next transfer application should be to a pension arrangement of which the provider is regulated by the Financial Conduct Authority, or to one that is directly related to active employment.

“I also recommend that he takes the advice of a person authorised by the Financial Conduct Authority. Doing otherwise will leave him vulnerable to a repeat of the experience he has already suffered, or worse.”

The latest decision follows three that were published last month, and is the second in relation to a scheme alleged to be involved in liberation activities for failing to comply with a request to transfer out.

In an earlier decision in relation to the Capita Oak pension scheme the ombudsman suggested the individual, who had initially transferred more than £370,000 from his NHS pension, may be required to take legal action to recover the full value of the fund.

donia.o’loughlin@ft.com