Prudential must pay redress to a client after a delayed pension transfer resulted in a loss of investment growth as the receiving scheme was no longer available.
In July, pension ombudsman Anthony Arter upheld Ms N's complaint against Prudential after she argued that her transfer didn’t take place when it was supposed to, which Prudential accepted.
Ms N said she lost out on investment growth because when Prudential eventually went to complete the transfer, the receiving scheme was no longer on HM Revenue & Customs qualifying recognised overseas pension scheme (Qrops) list.
The client first contacted Prudential in April 2017 to transfer her personal pension scheme to Canada, where she resides.
The transfer should have completed on June 13, 2019 but on June 21 the receiving scheme had to call Prudential asking for the transfer to be processed urgently after it believed Prudential had received all the documents required.
In July Prudential notified the receiving scheme that the transfer could not take place due to the suspension of transfers from Prudential's property funds.
It confirmed that it was planning to write to clients regarding the suspension from the beginning of August, but did not have a timescale on how long the suspension would last.
Following this, Ms N complained to the provider.
Prudential agreed that it had provided a poor level of service and that without its delay the transfer would have gone ahead as planned on June 13.
It added that as soon as the suspension was lifted it would ensure the transfer was made and confirmed it would transfer £76,687. It also offered to forward funds to cover any financial disadvantage caused by the delay, and £175 for the distress caused.
The suspension was lifted in November but the transfer still could not be completed as by then the receiving scheme had been removed from HMRC’s Qrops list.
Prudential offered Ms N £250 for the inconvenience but she decided to continue with her complaint as she would now have to find another financial institution to transfer to, or wait until the receiving scheme was added back to the Qrops list.
The life company expressed its concerns that there were no Canandian schemes on the Qrops list and that the receiving scheme may never be re-added and asked Ms N if she would consider another scheme.
But Ms N did not see how this would be beneficial to her as she was a resident of Canada.
When asked by Prudential, the receiving scheme confirmed that the $140,530 Canadian dollar equivalent on June 13, when the transfer should have taken place, would be worth $177,959 after the 21 months that had passed.
The case was then passed to the Pensions Ombudsman to reach an agreement.
Mr Arter said: “It is undisputed that Prudential caused delays which amount to maladministration and, as a result, Ms N has suffered a loss.”
The ombudsman decided that Prudential would have to arrange for the transfer of Ms N’s scheme into either the receiving scheme if it can be accepted or into another scheme of Ms N’s choosing.