TPO determines trustee breached fiduciary duty over death benefits

The Pensions Ombudsman (TPO) has determined that the David Whitehead & Sons Limited SSAS trustee, ‘Mr L’, breached his fiduciary duty over failure to pay death benefits in a timely manner.

According to its determination, ‘Mrs Y’ had complained that Mr L was doing all he could to frustrate and delay the process of paying her the death benefits she was entitled to, including failing to provide Rowanmoor Trustees, the scheme provider, with an up-to-date portfolio valuation.

The scheme had two members, Mr L and Mrs Y’s husband, Mr Y.

TPO noted that, as trustees of the SSAS, Mr L and Rowanmoor had a duty to act in accordance with the SSAS’ governing documentation and in the best financial interests of the trust’s beneficiaries.

It added that the evidence indicated that Mr L had breached his fiduciary duty as he failed to identify that he had a conflict of interest when making a decision about the death benefits payable on Mr Y’s death three and a half years ago.

Following the investigation of Mrs Y’s previous complaint, Mr L agreed to the appointment of an independent expert, but has refused to accept Robert Graham & Co’s conclusions and brought a separate complaint to the ombudsman against Rowanmoor.

TPO added that Mr L continues to not acknowledge or mitigate the conflict of interest he has as both a trustee and beneficiary of the scheme.

It also found, under his complaint against Rowanmoor, Mr L had no grounds to setting aside the independent expert’s conclusion and is bound to implement its findings.

Mr L has been ordered to provide Rowanmoor with any additional information it requires to put the independent expert’s determination into effect, including any portfolio valuations it needs to calculate Mrs Y’s benefits.

He must also reimburse Mrs Y any additional tax charge she may have incurred because of the late payment of her benefits.

Additionally, TPO ordered Mr L to pay Mrs Y £2,000 for the ‘severe distress and inconvenience’ she has sustained due to his failure to acknowledge and manage his conflict of interest.

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