TPO partially upholds complaint against Simon Group pension scheme trustee

The Pensions Ombudsman (TPO) has partially upheld a complaint against the trustee of the Simon Group Pension Fund and Barnett Waddingham, awarding £1,000 to the complainant for the serious distress and inconvenience caused.

‘Mr Y’ complained about the delays caused by Barnett Waddingham and the trustee when reviewing his transfer request, which he said included “excessive” and “erroneous” question for due diligence.

He also complained about the trustee’s decision to decline his transfer request to an overseas pension scheme, on the basis that it could not be satisfied that the receiving scheme was a Qualifying Recognised Overseas Pension Scheme (QROPS), as well as the trustee's offer to continue with further due diligence only if he covered the costs.

In addition to this, he complained that Barnett Waddingham would not provide a forecast of his benefits, thereby forcing him to transfer out of the fund.

This was alongside a broader complaint as to the level of service from both Barnett Waddingham and the trustee relating to his information requests and the responses he received.

Mr Y claimed that as a result of these issues, he was unable to retire as he did not have access to his funds, also incurring additional costs resulting from having to transfer to a UK-based defined contribution (DC) pension scheme, and suffering investment loss, distress and inconvenience.

The ombudsman, Anthony Arter, has now partially upheld the complaint, stating that the trustee took into account "irrelevant factors” when deciding to decline Mr Y’s transfer request, and that it subsequently failed to explained the reasons for its refusal in a “clear and consistent” manner.

He stated that the trustee had inappropriately asked Mr Y to cover the costs of further due diligence, even though it did not believe this would likely address whether the receiving scheme would qualify as a QROPS.

The ombudsman also acknowledged that Barnett Waddingham had caused delays when reviewing the information submitted for Mr Y’s transfer request, and that certain aspects of the service provided by both Barnett Waddingham and the trustee was “unacceptable”.

As such, the ombudsman has ordered the trustee to pay £1,000 for the “serious distress and inconvenience caused”.

TPO has also has ordered the trustee to decide whether the receiving scheme is a QROPS, clarifying that the scheme should not take into account the possibility that HMRC might decide to withdraw QROPS status in the future, as this is “irrelevant”.

Should the trustee decide that the scheme is not a QROPS, it has been directed to set out the reasoning for this, with Mr Y to be given the opportunity to complain about this to the trustee should he disagree, with the further option of bringing the complaint to the ombudsman, should he remain dissatisfied with the trustee response.

If, however, the trustee decides that the scheme is a QROPS, it has been directed to calculate the interest that ordinarily should be applied on the £69,642.74, the amount quoted for Mr Y in a 2017 cash equivalent transfer value (CETV), as a result of the decision and transfer delay.

If this equates to more than £75,586.27, the figure quoted for Mr Y in a March 2019 CETV, than the trustee shall transfer an amount equal to the difference between these figures to the receiving scheme.

It has also been directed to inform Mr Y of this and invite him to evidence any costs he believes he would not have incurred had the decision been made in July 2018, as well as the opportunity to evidence what the investment performance would have been from July 2018 to March 2019.

Should he demonstrate that this would have resulted in a figure greater than the March 2019 figure of £75,586.27, TPO has ruled that the trustee shall cover the costs that Mr Y has "unnecessarily" incurred.

This includes the cost of additional CETV quotations issued, the cost of the additional TVAS reports, and any additional financial adviser or transfer fees from July 2018 to the date when he transferred from the UK DCPS to the receiving scheme.

The trustee will also pay an amount equal to the difference between £75,586.27 and the investment figure to the receiving scheme within 28 days.

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