Personal Pension  

Omni-shambles over pension transfer

This month I will be discussing the Pensions Ombudsman determination in the case of Mark Crossland (PO-4414). This highlights the increasing trend of pension liberation cases coming before the Pensions Ombudsman.

The ombudsman upheld Mr Crossland’s complaint against Omni Trustees for failing to respond to his request to transfer his benefits out of the Henley Retirement Benefit Scheme. The ombudsman held that, even though Mr Crossland’s request did not fulfil the statutory requirements in relation to cash equivalent transfer values, Omni’s failure to act still amounted to maladministration.

In early 2013, Mr Crossland transferred, in accordance with his statutory right to transfer (please see below), the cash equivalent value of his pension policies from Scottish Widows and Wesleyan Assurance to the Henley Scheme. He wrote to Omni on 3 March 2014 to voice his concerns and to request a transfer value, although he did not state where he wanted his benefits to be transferred. Finally, on 3 June 2014 Mr Crossland made a further transfer request and this time named the Genwick Retirement Benefits Scheme as the scheme to which he wanted his benefits transferred, but Omni did not respond to these requests.

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It was difficult for the ombudsman to assess whether under the Henley Scheme Mr Crossland had a legal, freestanding right to transfer out his benefits or whether such a transfer was at Omni’s discretion due to the fact that Mr Crossland had never received any of the Henley Scheme’s governing documents, and no response was given to the inquiry request by Omni.

The ombudsman concluded that notwithstanding the scheme’s provisions, Mr Crossland could not be deprived of his statutory right to transfer his benefits if he had such a right. Section 94 of the Pensions Schemes Act 1993 provides that a member of an occupational or personal pension scheme has a right to a “cash equivalent transfer value” of any benefits which have accrued under the transferring arrangement. Section 95(1) provides that a cash equivalent transfer value can be taken by making an application in writing to the managers of the transferring arrangement and Section 99 requires the trustees or managers to carry out the member’s requirements within a specified period – usually six months from the application.

The ombudsman found that while the section 94 requirement was met – the scheme was referred to as an occupational pension scheme and Mr Crossland was considered a member of the scheme – Mr Crossland’s request did not meet the section 95 requirement.

Mr Crossland’s further request to transfer to the Genwick Scheme was also held unlikely to meet the statutory requirements.

The ombudsman went on to hold that Omni’s failure to respond to Mr Crossland was still undoubtedly maladministration and that its failure to respond halted the process. Had Mr Crossland made a transfer request that complied with the statutory requirements and the nominated scheme was prepared to accept the transfer, Omni would have had an obligation to pay the transfer value to the nominated arrangement.