TPO partially upholds complaint against Aon and Barnett Waddingham

The Pensions Ombudsman (TPO) has partially upheld a complaint against Aon and Barnett Waddingham over the implementation of a pension sharing order.

As part of the complainants divorce, Aon, who administrated Mr H’s pension at the time, received a copy of a pension sharing order relating to his benefits in 2010 but was uncertain about how to implement the order between late 2010 and early 2011.

In February 2017, Aon contacted Mr H ahead of his reaching normal retirement age in August, issuing him with retirement paperwork.

Mr H was instructed by his advisers to contact Aon regarding the pension sharing order in March 2017, at which point Aon informed him that it did not have a copy of the order and that it had not started the implementation process, which he was told would take two months.

In May of that year, Mr H was provided with a cash equivalent transfer value (CETV), although this was overstated as the order had not yet been implemented and in July 2017 Aon said it was still calculating the figures.

In August 2017 administration of the London Clubs Limited Pension Scheme passed to Barnett Waddingham, who were informed by Mr H’s advisers that the order had not yet been implemented.

Barnett Waddingham provided Mr H with a corrected CETV in December 2017 and this balance was paid to the receiving scheme in March 2018, though it transpired that the calculation included benefits that had been accrued after the effective date of the pension sharing order, meaning that the CETV was underpaid.

Mr H complained to both Barnett Waddingham and Aon at this point, with the former stating in September 2018 that a written response would be issued within the space of two months.

Aon, the scheme secretary and former administrator, acknowledged the disparity between the two CETVs but said the transfer value displayed was not a “transfer value which complied with the requirements of pension legislation” and was therefore not a figure that Mr H could rely upon.

The scheme trustee accepted that implementation of the pension sharing order had been delayed and that Mr H had been inconvenienced because of this.

Mr H has complained that Aon failed to implement his pension sharing order before the administration of the scheme transferred to Barnett Waddingham and argued that Aon should reimburse the charges for implementing the order.

He also complained that he was unable to access his benefits until April 2018, as the transfer of his pension was delayed, with the value of his pension decreasing by £9,000 in the intervening period, while also noting that Barnett Waddingham failed to implement the pension sharing order from its effective date.

In response to the complaint, TPO said Aon’s “maladministration, in failing to implement the order, had delayed the transfer process” and added that Mr H had taken “reasonable steps” to minimise his financial losses.

The ombudsman added: “I acknowledge that Aon and Barnett Waddingham have paid a total distress and inconvenience award of £2,000 to Mr H in relation to this matter. The award is in line with what I would direct for non-financial injustice in similar cases.

“So, I am not making an additional award. I also consider that it was appropriate, in the circumstances, for Aon to have met £1,500 of the cost of that award.”

TPO directed Aon to obtain Mr H’s written consent to request information from the receiving scheme in order to carry out a loss assessment within 21 days of receiving the information, as well as paying any fee required to obtain this information.

If the assessment identifies any shortfall in Mr H’s unit holdings, Aon has been instructed to pay the receiving arrangement the necessary amount to purchase enough units on behalf of Mr H to make up for this shortfall.

Aon was also directed to inform Mr H of the results of the loss assessment and the amount paid into the receiving arrangement.

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