The Pensions Ombudsman has upheld a complaint that an alleged liberator refused to act on a saver’s request to transfer out of a pension plan, but warned it is doubtful the scheme will adhere to this order and the saver may have to enforce the direction through the courts.
In the thirteenth decision relating to pension liberation, the ombudsman told scheme administrator AC Management and Administration Limited that it must transfer complainant Dawn Owen’s pension to a named scheme that meets the “prescribed requirements under legislation”.
The transfer value, which was not mentioned in the decision, shall be the higher of the cash equivalent transfer value as at 31 January 2015, plus simple interest at the average rate, or the correctly calculated cash equivalent transfer value at the date of payment.
However, ombudsman Anthony Arter warned that he is not confident AC Management will comply with the direction, as it has failed to respond throughout the investigation.
Mr Arter wrote: “If AC Management do not comply, Ms Owen may attempt to enforce the direction through the courts, but sadly, even if AC Management respond, she may find that some or all of the money is no longer there.”
The case stems from early 2013 when AC Management, which was acting on behalf of Ms Owen, transferred two pension policies to the AC Management and Administration Fixed Income Retirement Plan.
AC Management confirmed to Reliance Mutual their role as scheme administrators and provided client account details for payment, as well as the plan’s HMRC registration number. Following the transfer, a company named Green Footprint Investments wrote to Ms Owen asking her to complete a members investment decision form.
Ms Owen opted, on 30 January 2013, for 75 per cent in Just Loans, which was said to have an investment term of three years and a 7.5 per cent fixed return, with 25 per cent in “FSA regulated investments”.
Ms Owen told the ombudsman that she has not been able to obtain “important information” about her pension for over 12 months to enable her to review financial position and exercise her rights.
She had been in email contact with Mark Harris from AC Management, but he is no longer replying to her, the ombudsman said, adding that in emails dated 17 November and 3 December 2014, she requested a transfer value.
The pensions ombudsman wrote to AC Management for their response to the complaint, but the “post has been returned”.
The decision said: “They have given no explanation to Ms Owen (or us) regarding their lack of contact, failure to provide a transfer value or move of premises.
“She transferred to the plan, which is of a type that is designed to avoid regulatory obligations that would otherwise limit scope for abuse and/or bad advice. She apparently did so in search of high investment returns and increased drawdown flexibility.
Mr Arter added: “I do not know what has happened to the assets she transferred, they may or may not be secure, though she is very rightly concerned that they are not.”
The complaint does not refer to the transfer itself, but the fact that Ms Owen cannot transfer out of the scheme, therefore Mr Arter had to establish whether she had a legal right to transfer out of the plan.
Under occupational or personal pension scheme regulations, the trustee or managers must carry out the member’s requirements within a specific period, which in this case, was six months.
“However, to qualify as an application for the purpose of the six month time limit for payment it needed to require AC Management to use the transfer value to acquire credits in an occupational or personal pension scheme, the trustees or managers of which were able and willing to accept payment,” read the decision.
“Strictly, Ms Owen’s original request did not meet the test. But, it was unquestionably maladministration not to respond – and it is the lack of response that stopped the process.”
Mr Arter concluded that therefore he could “see no reason” why the transfer could not have been paid by the end of January 2015.
donia.o’loughlin@ft.com
