Defined Contribution  

Regulator intervenes after pension switching chaos

Regulator intervenes after pension switching chaos

The Pensions Regulator has intervened and appointed an independent trustee to a scheme after a client struggled to switch his pension despite ombudsman backing.

Sally Holmes, daughter of Robert Dewar, told FTAdviser she is still waiting for the pension trustee of the Commando 2012 Pension Scheme to make good on a pension switching request made by her father in February 2018, alongside redress payments ordered by the Pension Ombudsman.

Mr Dewar transferred his £155,891 pension from the Halifax defined benefit scheme to the Commando scheme in 2012.

According to Ms Holmes, who took over her father’s finances due to his ill health in 2017, her father's transfer was carried out by Simon John Colfer who later admitted to conning hundreds of people in a complex pension fraud, and was given a suspended prison sentence in May 2018.

Colfer was found to have posed as a financial adviser promising savers they would receive a cash lump sum of up to 25 per cent of the transfer value if they transferred using his services. As a result of the transfer Mr Dewar had to pay a tax charge to HM Revenue & Customs of £14,000.

A Pension Ombudsman decision published last month (May 28) showed due to Mr Dewar’s health deteriorating, he wanted to start drawing down his pension. He submitted the relevant forms in August 2017 to access his pension in November that year.

But after delays in processing the payments, Mr Dewar decided to switch his pot to PensionBee in February 2018. At that point his pension fund value was worth £137,620.

The transfer request was passed to Stuart Garner, the scheme trustee, on March 14, 2018.

In April, Mr Garner wrote to Ms Holmes explaining that the scheme had had an unprecedented amount of transfer requests in the previous months, "primarily due to an HMRC tax charge to some members and they requested transfers out to pay tax bills".

The Commando scheme is primarily invested in preference shares in the capital of Norton Motorcycles, which is owned by Mr Garner.

He added: "We are working closely with the Norton accounting team and making good progress in getting transfer requests completed.

"As the scheme is fully invested, it does take time for Norton to cashflow all requests as they are obviously a trading business and using the capital for trading the business. They are in good shape, it is simply a timing issue as they manage funds for the transfers."

Mr Garner said Ms Holmes that her father’s case was then at "the top of the transfers list" and that he expected to transfer the funds in mid-May.

Ms Holmes said this was the last time she had heard from Mr Garner, before taking the case to the Pension Ombudsman, who upheld the complaint.

According to the Pension Ombudsman, Mr Garner failed to engage with its officials throughout the process and Ms Holmes did not hear from him afterwards.