Pensions Ombudsman  

Policeman to get his pension back after trustee failing

Policeman to get his pension back after trustee failing

A former police officer will get his pension benefits reinstated because the scheme's trustees did not conduct adequate checks to prevent fraud, the Pensions Ombudsman has ruled.

The claimant, Mr N, transferred benefits worth more than £112,000 to London Quantum in 2014, an occupational scheme created two years earlier.

But the money was feared lost after the scheme's sponsoring employer, Quantum Investment Management Solutions, went into liquidation.

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The transfer was done after Mr N saw an unregulated introducer but the officer claimed he did not realise it had involved a high-risk investment and him being classed as a sophisticated investor.

Ombudsman Anthony Arter ruled the Northumbria Police Authority had failed to conduct adequate checks and enquiries in relation to Mr N’s receiving pension scheme.

It had also failed to send him TPR's transfer fraud warning leaflet, and to engage directly with Mr N regarding the concerns it should have had with his transfer request, had it properly assessed it.

Mr Arter said: "Having considered all the available evidence, I am satisfied, on the balance of probabilities, that but for the authority’s maladministration Mr N would not have proceeded with this transfer and suffered a loss."

Northumbria Police Authority will now have to reinstate the claimant's accrued benefits in the scheme, or provide equivalent benefits, adjusting for any revaluation that has arisen since the transfer.

Meanwhile, the Pensions Regulator (TPR) has appointed independent trustees Dalriada Trustees who are trying to reconcile the remaining assets and establish if any funds can be returned to the scheme members.

If they are able to recover any of Mr N’s funds, the pension scheme is entitled to retrieve that amount, Mr Arter added.

The police authority was also ordered to pay Mr N £1,000 to "reflect the materially significant distress and inconvenience" he suffered as a result of its failings.

Mr N, then aged 39, sought advice on transferring to another pension provider to ensure he could access his pension at age 55.

In August 2013, he contacted a company called Pension Transfer UK. He received a follow up phone call about two weeks later from Viva Costa International, an unregulated introducer, and was referred to Gerard Associates.

In June 2014, Mr N met with a representative from Gerard to discuss a transfer, and was provided with further documentation including its pension transfer analysis document and a cash equivalent transfer value quotation from the police authority.

He signed an agreement to transfer his benefits, for which Gerard took a fee of almost £5,000.

In 2015, Mr N looked again at the documents he had been given, and was concerned to find out that he had signed up to a high-risk investment as a sophisticated investor. 

Mr N brought a complaint against Gerard to the Financial Ombudsman Service.

In January 2016, this was rejected as being outside the Financial Ombudsman Service’s jurisdiction on the basis that no regulated activity had been carried out by Gerard.