Pensions Ombudsman  

Ombudsman to get power to settle cases early

Ombudsman to get power to settle cases early

The government and pensions industry have agreed that the Pensions Ombudsman (TPO) should be given powers to introduce an early resolution service.

In a consultation published in December, the department for Work and Pensions proposed a series of measures that would allow TPO to centralise decision making and cut its costs.

One proposal was to permit the body to provide an early resolution service, which would allow it to settle disputes between firms and customers before reaching a binding decision.

At the same time TPO should be able to handle complaints from employers regarding the pension scheme they chose for their staff.

According to the consultation response, published yesterday (August 8), 76 per cent of respondents were supportive of some form of early resolution function as they saw it as a way to deal with less complex cases quickly.

This service would also determine whether a dispute could be resolved before going down a more formal route.

But some respondents warned this could result in increased costs to trustees if this process were to run in parallel with a scheme’s internal dispute process.

Also, there could be potential conflicts of interest if a case subsequently went down the formal determination route.

Despite this, the DWP also agreed that TPO should have the power to close cases where a settlement has been agreed by both parties.

There were mixed views on whether a pension scheme’s internal complaints process should be the first step to take or whether this could be bypassed by the ombudsman.

The majority of respondents believed that the pension scheme should be the first port of call as it may be able to sort a complaint without needing to involve the ombudsman.

But others wanted TPO to be the first stage or at least for there to be an option to bypass the scheme.

The government stated that an early resolution process should be available at any stage of the scheme’s dispute process. 

The DWP noted there may be an overlap between the TPO’s jurisdiction and the Financial Ombudsman Service’s (Fos) jurisdiction but stated the “Memorandum of Understanding between the two organisations will help clarify which of the two organisations is better placed to help with specific complaints”.

It stated it will work with the Treasury and the Financial Conduct Authority (FCA) to support each of the services when determining the best outcome for consumers.

The DWP stated: “We will be seeking to bring forward legislation to provide a framework for the proposals in due course.”

Anthony Arter, the Pensions Ombudsman, said: “We welcome the measures outlined in the government response and look forward to the necessary legislation being put in place in due course.”

In total, the DWP received 25 formal responses to the consultation.

This included providers Aviva, Aegon, the NHS Pension Scheme, Mercer, and Smart Pension.