Personal Pension  

Ombudsman refuses to apply retrospective regulation

Ombudsman refuses to apply retrospective regulation

The Pensions Ombudsman has backed Prudential in two separate complaints made by savers who became unable to locate their pension funds after transferring to alleged liberators.

In the recently published decisions, Andrew Johnston and Ronald Powell complained that Prudential transferred their pension schemes without conducting sufficient checks on the receiving schemes and now both cannot find their money.

Both were members of the Prudential Personal Pension Plan.

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However, pensions ombudsman Anthony Arter concluded in both decisions that while he had “great sympathy” for the position the consumers find themselves in, Pru did not commit an “administrative failure” by complying with the transfer requests.

He added that both members wished to exercise their legal rights and both receiving schemes were “properly registered” with HM Revenue and Customs, providing the appropriate declarations and information at the time.

However, Mr Arter hinted that if the transfers had taken place after the Pensions Regulator published its pension liberation guidance in February 2013, his conclusions may have been different.

Mr Johnston requested a transfer on 24 August 2012. Capita Oak wrote to Prudential on 3 October 2012, with the completed transfer discharge documentation. Prudential processed the £18,643 transfer on 10 October 2012.

On 26 January 2013, a company called Designed 4 Life contacted Prudential with a signed authority from Mr Johnston, saying he had instructed them to investigate his pension options, requesting a current transfer value. Prudential replied that the policy had already been transferred out.

In February that year, Capita Oak sent Mr Johnston an ‘investment choice letter’ to be signed and returned, with an opening statement following in April. Since then, he has been unable to obtain further information about his pension from Capita Oak, Imperial Trustee Services, or Barncroft Associates, which all helped facilitate the transfer.

He complained to Prudential that they had not carried out a proper procedure in making the transfer and to take responsibility for reimbursing him the missing money. Prudential replied that they had acted in “good faith” under Mr Johnston’s specific instruction.

In the second, similar case, Mr Powell requested in August 2012 that Prudential transfer his £54,503 pension to the Dataspec Pension Scheme, which was said to be a money purchase occupational scheme.

A letter dated 31 May 2012, to Mr Powell, from Pension Marketplace, said to be a trading name of UK Pension Transfers, asked him to contact his pension provider for a full pension illustration and to complete and return a letter of authority. The top of the letter said “£25,000 back, no cost”, according to the decision. A further letter signed by Mr Powell also confirmed that the transaction was execution-only.

Prudential processed the transfer on 31 August 2012.

A loan-agreement was made between Mr Powell and the Regent Group in the amount of £27,251 and an undated letter asked for this sum to be transferred to his bank account. Interest of 6 per cent per annum was to be charged, but there was no requirement by Mr Powell to make repayments before the lock-in date of 31 December 2026.