Defined Benefit  

Portafina to pay out over DB transfer delay

Portafina to pay out over DB transfer delay

Portafina has been ordered by the Financial Ombudsman Service to compensate a client after a delay to his defined benefit transfer resulted in a lower transfer value.

Portafina was ordered to pay out after the Fos found Portafina had been instrumental in the delays to the transfer.  

In its decision, the ombudsman clarified that the complaint was not in reference to the advice Portafina gave to transfer but on the delay and the loss caused by the drop in the cash equivalent transfer value.

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The client, who the Fos called Mr W, complained to Portafina about delays in the transfer of his DB pension scheme benefits to an annuity provider, saying this caused him to lose £4,000.

Ombudsman Roy Milne found Portafina was involved from the outset in arranging the DB transfer and was aware of the deadline to keep the original CETV and what was needed to process the transfer.

He said all the information should have been requested back in September 2013 at the initial point of contact and criticised Portafina for chasing information it had already received.

Mr Milne said: “Portafina chased for information they had already received. They should have had all the information they required by mid-October. 

“This would have provided two months for Portafina to research annuity options for Mr W, formulate their advice and send his transfer request to the new provider. In my view, this should have been achievable.”

Therefore, Portafina was ordered to put Mr W in the position he would be now if Portafina had not caused delays to the transfer.

This means he would have received the original CETV of £32,555 and would have received a higher tax free cash sum and monthly income payments.

Portafina wrote to the administrators of Mr W’s pension scheme in September 2013 requesting information about his pensions, which the scheme provided on September 17.

The scheme stated Mr W had a CETV of £32,555 which was guaranteed until December.

Portafina then went on to chase this information on two more occasions despite the scheme reiterating the information it had already sent.

Following a pension transfer analysis, Portafina contacted the scheme again to request an early retirement quotation.

The scheme replied saying early retirement was not available.

Despite this, Portafina contacted the scheme several more times to chase this information.

LV, as chosen annuity provider, eventually sent the transfer request to the scheme in March 2014 but missing paperwork caused even further delays.

Due to this the original transfer value had expired and the new calculation resulted in a CETV of £28,420, £4,000 less than before.

Mr W complained to both Portafina and the scheme about the transfer delay but Portafina said it had actively chased the scheme for outstanding information.

Portafina must also pay £250 for the distress and inconvenience.

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