Hornbuckle under fire for Ssas failings

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Hornbuckle under fire for Ssas failings

Pension provider Hornbuckle has admitted to "numerous failings" with the way it handled a client's small self-administered scheme (Ssas).

A client, referred to as Mr N, complained Hornbuckle delivered incorrect information and poor customer service between 2011 to 2015.

In November 2011, Mr N joined a Ssas and Hornbuckle was appointed administrator and corporate trustee.

In October 2014, following numerous instances of maladministration, including but not limited to delays, incorrect information and poor customer service, the Ssas was transferred to a new administrator, Talbot & Muir.

In December 2014, Mr N raised several complaints against Hornbuckle and in March 2015, Hornbuckle admitted there had been delays issuing Land Registry documents, it failed to provide a consistent standard of service plus it had taken too long to respond to correspondence.

Hornbuckle also held up their hands for failing to provide a single point of contact or confirm payments leaving the scheme account.

The pension provider also admitted it provided the wrong information to Mr N’s financial adviser Grant Thornton (GT), Talbot & Muir and his accountant, Churchgate Accountants.

But Hornbuckle argued it hadn't failed to issue rental invoices and correctly calculated tax payable on income.

While Hornbuckle had issued these historically, it argued it was the responsibility of the property manager to send rental invoices to the tenant, and the tenant was aware when to pay rent as outlined in the tenancy agreement.

Hornbuckle said it informed Talbot & Muir that it had used the correct tax code provided by HMRC and tax had been correctly deducted from income payments.

A spokesman for Hornbuckle added he was sorry Mr N felt obliged to leave, due to his poor experience with the provider, but added he was unable to waive the Ssas takeover fee as he requested.

However Hornbuckle agreed to reduce it to £875 plus VAT, which it believed was appropriate redress for the mistakes that had been made.

In July 2015, Hornbuckle wrote to Mr N again about a loan made by the Ssas to Mountain Farms Limited, which Talbot & Muir had suggested might be deemed an unauthorised payment.

The regulations required that a loan be secured by a first charge over an asset of sufficient value and Talbot & Muir's concern was that this had not happened.

After consulting its legal advisers, Hornbuckle agreed that HMRC might consider that an unauthorised payment had occurred.

So Hornbuckle had investigated whether it was responsible.

The provider did not know until 29 February 2012, when Mr N informed it, that completion of the land transfer had occurred and in his email dated 29 February 2012, Mr N noted that he was aware of the requirement for a legal charge.

If Hornbuckle had been made aware of completion, the provider insisted the loan would have been repaid against the purchase price, and a potential unauthorised payment would have been avoided.

However, Hornbuckle stated if HMRC considered a later £40,000 payment to be an unauthorised payment, it would agree to meet the cost of any financial penalty.

So Hornbuckle upheld this part of Mr N’s complaint.

It was later discovered a £40,000 payment was not required by HMRC.

Despite Hornbuckle offering compensation in June 2016, Mr N wrote to the ombudsman arguing the total cost of resolving the issues had cost him more than £14,000.

He provided a breakdown of this figure for the ombudsman and added "on top of this the stress and strains of all these issues combined have been harrowing."

While most of Hornbuckle's mistakes were uncontested it did not agree with the amount of compensation Mr N was now claiming.

The ombudsman agreed with Hornbuckle and ruled the provider’s total offer of £4,375 - that is, a refund of the £3,000 annual fee, a halving of the Ssas takeover fee, of £875 plus VAT, and £500 in recognition of distress and inconvenience - was sufficient.

Regarding Hornbuckle's mistake in incorrectly amortising the Ssas loan back, the ombudsman said that this could have, but did not, result in a substantial loss of income to the Ssas.

Deputy pensions ombudsman Karen Johnston said: "I do not find that Hornbuckle's actions around this time amount to maladministration. Therefore, I do not uphold Mr N's complaint.

"This outcome is not intended to detract from the numerous failings admitted by Hornbuckle. But it acknowledges the principle that I will not uphold a complaint where the applicant has received an acknowledgement of what went wrong, and a reasonable remedy, before the complaint was made to this office."

emma.hughes@ft.com