A “landmark” ruling by The Pensions Ombudsman (TPO) against Northumbria Police Authority, who transferred the member out of the scheme without “adequate checks or enquiries”, could open the door for previous scam victims, it has been said.
Last month, TPO ruled that the authority failed to conduct proper checks for the member’s new scheme, London Quantum Retirement Benefit Scheme, and also failed to send him The Pensions Regulator’s official anti-scam Scorpian document.
The complainant, Mr N, was concerned that his pension fund may have been “lost or misappropriated”, and Royal London director of policy Steve Webb believes past victims may be able to “get redress” if their scheme failed to protect them adequately.
Webb said: “This is a very important ruling. Whilst individuals obviously have a responsibility to take good care of their pensions and to take proper advice, this ruling shows that pension schemes also have important duties to protect members.”
“Not only should they flag the risk of scams, but they should also be undertaking thorough checks about where the money is going to be transferred to. It might be the case that some past victims of scams who have complained to a pension scheme and been turned away could still get redress if the Ombudsman thinks that their scheme trustees did not do a proper job in protecting them.”
According to Royal London, warning signs should have flashed when it emerged that London Quantum was a new scheme and therefore “it should have been obvious that a Northumberland police officer was unlikely to have a working relationship with a London-based occupational scheme”.
Mr N requested to transfer out of the Northumbria Police Authority scheme after he applied to reduce his working hours, and wasn’t sure if he would be able to access his pension until he retired at age 60, and was unsure if he would still be employed by the authority.
Subsequently, he was referred to financial advisers Gerard Associates Limited, who took a £5,000 cut of the £112,077.06 transfer to London Quantum.
The defined contribution scheme was run by Quantum Investment Management Solutions who are now in liquidation.
TPO said that the authority shall reinstate Mr N’s accrued benefits into the scheme or provide any equivalent benefits “adjusted to any revaluation”.
Furthermore, the authority has also been ordered to pay Mr N £1,000 for any “significant distress and inconvenience” suffered as a consequence.