The Pensions Ombudsman (TPO) has ruled in favour of the trustees in a case concerning a pension transfer made before the 2021 transfer regulations came into effect, confirming that they were not obliged to carry out checks beyond the statutory requirements.

The complaint was brought to TPO by a pension scheme member, Mr D, who transferred from the British Steel Pension Scheme to a small self-administered pension scheme in 2014.

Although the transfer was voluntary, Mr D later argued that the trustees of the scheme did not do enough to check the new scheme for scam warning signs, or to warn him about any risks, which he claimed led him to lose out on “valuable retirement benefits”.

The parties agreed that the transfer was a statutory transfer under the Pensions Schemes Act 1993, took place between two workplace pension schemes and was completed on 1 September 2014.

Given this, TPO's case focused on what the trustee’s duty of care was at that time to Mr D, for example in respect of due diligence, when making the statutory transfer from the occupational pension scheme.

In particular, TPO's investigation considered whether trustees were required to carry out additional checks before allowing a member to transfer, such as those outlined in The Pension Regulator’s Action Pack or the Scorpion leaflet, which aimed to help identify potential pension scams and warn members of the associated risks.

It also looked at trustees’ duties under the Pension Schemes Act 1993, other statutory and regulatory due diligence requirements, and broader duties of care.

However, it concluded that there was no general, common law or equitable duty of care that required the trustee to conduct the due diligence suggested by Mr D.

Additionally, TPO further observed that the trustee had not voluntarily taken on the responsibility to investigate the scheme Mr D wanted to transfer into, and the trustees had not promised or suggested that they were conducting due diligence that Mr D could argue that he then relied upon to his detriment.

TPO highlighted the ruling as an "important legal assessment" of a trustee’s duty of care when considering a statutory transfer request from an occupational pension scheme, for the period from February 2013 until the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 came into force on the 30 November 2021. Although each case turns on its own facts, it is likely to inform TPO’s approach to similar cases.

Although each case depends on its own details, TPO said that this decision is likely to guide how the ombudsman will deal with other similar complaints.

It also confirmed that more decisions will be issued “in due course” on transfers from personal pension schemes, which are regulated by the Financial Conduct Authority, and on cases where a discretionary/non-statutory transfer is being considered.

This decision comes at a time of increased focus on pension transfers and scam awareness, with PensionBee only last week calling on the government to update the 2021 pension transfer regulations, as it said there is no clear correlation between the number of flags raised and the number of scams.

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