Pensions Ombudsman admits it’s struggling to cope

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Pensions Ombudsman admits it’s struggling to cope

The Pensions Ombudsman has admitted it’s facing challenges in relation to increasing volumes of work, with over 1,300 new investigations predicted to be taken on over the coming year, up 42 per cent compared to the 915 five years ago.

The organisation’s annual report for 2014/15 stated: “We are finding it hard to keep pace with the demand for our services within existing resourcing levels. The net effect is that it is taking us longer to deal with cases and our carry forward caseload is increasing.”

The ombudsman explained that the workload is anticipated to increase further as a result of pension changes: increased flexibility on retirement; public sector pension scheme changes; and automatic enrolment which will see many more people becoming members of pension schemes.

In order to comply with the Alternative Dispute Resolution directive the pensions ombudsman needs to provide complainants with the opportunity to make an online application to us, something which it does not currently provide.

Plans are underway to have this in place later on in 2015, with work being undertaken with the Department for Work and Pensions to meet the requirements.

The ombudsman took on 1,281 new investigations – 21 per cent more than 2013/14 and 22 per cent more than it planned to at the start of the 12 month period.

It completed 970 investigations, compared to 1115 in 2013/14, due in part to dealing with the large number of the pension liberation cases and a delay in replacing staff.

There were 177 complaints concerning alleged pension liberation - a number of which were determined earlier this year. In total, 38 per cent of complaints were upheld, at least in part.

Investigations ended in the year took 9.8 months on average to complete, with the most common topics of completed complaints being missing, late or incorrect benefits, followed by misquotations/misinformation, then transfers and ill-health retirement.

Anthony Arter, the new pensions ombudsman, stated that the challenge over the next year will be to reduce the backlog ensuring that complaints are dealt with in a timely manner whilst maintaining the quality of the process and decisions made.

“This trend is likely to continue with increased public awareness, issues concerning pension flexibility and auto-enrolment. Also, should a secondary annuity market be introduced, there may be complaints arising from the ability to assign annuities.”

He stated that the corporate business plan for 2014-2017 is being reviewed to see whether it needs updating in order to take into account legislative changes.

“However, many of its objectives remain unchanged. For example, it is vital that we reduce the time it takes to assign a case to an investigator; we are trialling various approaches to see if this can be addressed within our existing resources.”

The ombudsman did stay within its budget for the year though, with costs of £3.291m compared to budgeted operating costs of £3.305m.

The cost per investigation was £3,392 however, compared to a budgeted cost per investigation of £3,000.

peter.walker@ft.com