Prudential ordered to pay investment losses over transfer delay

The Pensions Ombudsman (TPO) has instructed Prudential to reimburse a UK client for any investment losses incurred due to its delay in transferring their pension savings to a Canadian scheme.

The estimated repayment figure is around CAN $37,460, as the receiving scheme confirmed that, if Prudential had transferred CAN $140,500 of savings from ‘Ms N’ at the initial request, on 13 June 2016, they would now total approximately CAN $177,960.

TPO has also ordered Prudential try and complete the transfer into the Canadian receiving scheme, pay a further £575 for the “serious distress and inconvenience” Ms N has suffered and pay HMRC any necessary amount to cover any tax charges.

If the receiving scheme is unable to accept the funds, Prudential must pay them into a scheme of Ms N’s choosing.

In April 2016, Ms N contacted Prudential and requested the transfer into the Computershare Trust Company of Canada, Edward Jones Locked-in Registered Retirement Savings Plan 574-599.

The firm was delayed in transferring the funds as it did not include overseas transfer paperwork in its initial correspondence with the receiving scheme and was inefficient in its communications.

Following nearly four months of delays, Prudential informed the receiving scheme the transfer could not go ahead as Ms N was invested in its Property Fund, which was suspended due to the high level of uncertainty in the markets.

Following complaints from Ms N, Prudential admitted it has provided a poor level of service and that the transfer would occur as soon as the suspension was lifted, which happened on 4 November 2016.

However, the receiving scheme was removed from HMRC’s QROPS list on 1 November 2016, and the transfer could not go ahead as planned.

Over a year later, in December 2017, there were still no Canadian schemes on the QROPS list, and Ms N was unwilling to transfer to another country as she was a Canadian citizen and saw no financial benefit in doing so.

Following correspondence with The Pensions Advisory Service, Prudential were no closer to a resolution so presented the case to TPO.

TPO upheld the complain from Ms N and has ordered Prudential to transfer her savings to another scheme of her choosing as soon as possible, reimburse her for the investment losses and pay £1,000 for the stress caused, of which Prudential had already paid £425.

In his ruling, ombudsman Anthony Arter said: “It is undisputed that Prudential caused delays which amount to maladministration and, as a result, Ms N has suffered a loss. Nevertheless, a resolution has not been found.

“Generally, this would be to put Ms N back into the position that she would have been in, had it not been for Prudential’s maladministration.

“That is because the specific maladministration which occurred here was negligent administration; failing in its duty to efficiently process and ultimately complete a transfer to which Ms N was entitled, and which should have gone through before the opportunity was lost and/or further delayed.”

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