Regulation  

Ombudsman refuses to apply rules retrospectively

Ombudsman refuses to apply rules retrospectively

The Pensions Ombudsman has refused to apply retrospective regulation to a pension complaint, ruling that Aviva did not commit maladministration by transferring a pension worth almost £40,000 to a firm that has been at the centre of liberation allegations.

Anthony Hughes complained to the ombudsman that Aviva transferred his pension to Capita Oak Pension Scheme without sufficient checks on the receiving scheme and as a consequence he can now not locate his fund.

Pension ombudsman Tony King referred to Capita Oak, which invests asset in storage container investments, as the “type that is designed to avoid regulatory obligations that would limit scope for abuse and/or bad advice”.

It is cited in relation to pension ‘liberation’ claims, a term which refers to schemes which provide assets to members before they are legally allowed the access the fund. Such transfers can attract 55 per cent unauthorised charge penalties.

However, Mr King noted that the transfer was requested one month before the Pensions Regulator issued guidance to providers about such cases, which he described as a “change in what might be regarded as good industry practice”.

He explained: “I cannot apply current levels of knowledge and understanding of pension liberation/scams or present standards of practice to a past situation.”

In January 2013, Mr Hughes contacted Aviva to request a pension transfer to Capita Oak, telling the provider that he had spoken to an unnamed adviser about doing so.

Aviva sent him the paperwork, including a transfer value of £37,893, along with a warning that it “strongly recommended” Mr Hughes seek financial advice before making any decisions. The transfer went ahead in March 2013.

Mr Hughes also made similar contact with Countrywide Assured to transfer a further pension policy to Capita Oak, but the firm said it was unable to proceed without sight of the original policy schedule.

In July that year, Countrywide sent Mr Hughes a leaflet from The Pensions Regulator explaining pension liberation fraud and asking him to complete a member’s declaration form regarding the background circumstances. It also contacted Capita Oak for clarification on scheme arrangements.

The decision notice said: “I understand that the transfer from Countrywide Assured to the Capita Oak Pension Scheme did not proceed, although I do not know whether that was because a formal refusal to transfer decision was taken... or Mr Hughes became concerned at the risks and decided not to proceed.”

Mr Hughes wrote to Aviva with a formal complaint in August 2014, stating that the provider should reimburse him the amount transferred, plus the additional funds which would have accrued had his pension remained invested with Aviva.

Mr Hugh’s argument was that Aviva should have refused the transfer in the same way that Countrywide did.

The following month, Aviva wrote to Mr Hughes stating it had acted in good faith under his specific instruction.

“Whilst the primary responsibility for any losses suffered as a result of pension scams lay with the perpetrators, Aviva considered that plan holders must also take some responsibility for their own decisions.”