The Pensions Ombudsman (TPO) has upheld a transfer complaint against B.S Pension Fund Trustee Limited and ordered the trustee to pay any potential increase in the transfer value.

The trustee was told to contact the receiving scheme and ask it to calculate the notional current fund value on the basis that the original transfer value had been paid on 7 February 2018.

This is then to be compared with the actual current fund value, with the trustee responsible for paying any difference between these two amounts.

The trustee was also ordered to pay £500 for the distress experienced by the complainant

‘Mr N’, who became a deferred member of the British Steel Pension Scheme (BSPS) in 2013, complained that delays to his cash equivalent transfer value (CETV) quotation had resulted in over £2,000 financial loss.

Mr N originally requested a CETV quotation on 30 August 2017, subsequently following up with the administrator on 29 September 2017 and 16 October 2017.

At the same time (October 2017), the trustee also began its ‘Time to Choose’ initiative, which saw members asked whether they would like to transfer to the new scheme or remain in the BSPS and enter the Pension Protection Fund.

The administrator responded to Mr N on 7 November 2017 to provide a CETV quotation for £26,635.33, which was guaranteed for three months from the date of issue.

Mr N however, stated that he did not receive this letter, only becoming aware of the quotation in December 2017, when the administrator wrote to Mr N to forward a letter containing “important information” around the transfer of benefits.

He attempted to phone the administrator on 4 January 2018 and, after failing to get through, wrote to the administrator on the same day to confirm that he had not received the quotation.

After failing to reach the administrator via phone or email on both 1 and 9 February, Mr N raised a customer service complaint, explaining that he was yet to receive the quotation despite numerous follow ups, and that he needed this information to decide whether or not to transfer.

The administrator subsequently confirmed on 14 February that whilst Mr N’s CETV quotation had been sent to him, the expiry date had now passed, and that, in line with his statutory entitlement, only one CETV would be issued in any twelve-month period, meaning that Mr N was unable to proceed with the transfer of his benefits out of the BSPS.

Mr N had however, agreed to move to the new BSPS during the Time to Choose exercise, meaning that once the new scheme was completed in March 2018, he would be able to receive another CETV quotation.

However, he later clarified that whilst he had previously expressed a wish to move to the new BSPS, he did so on the understanding that he would have the option to transfer to another scheme prior to that change, which was not the case as he failed to receive his CETV quotation.

The trustee responded to Mr N’s complaint in February 2018, stating that it did not agree that he had suffered financial loss as it had responded with a CETV quotation within the statutory requirements.

Furthermore, whilst the trustee did accept it had been unable to respond to member queries as quickly as it normally, it argued that this was as a result of “extremely high levels of member engagement” amid the Time to Choose exercise.

Following the commencement of the new BSPS in April 2018, Mr N was able to request a new CETV quotation, which he received on 6 June 2019 for £24,568.22, £2,067.11 less than the quote provided prior.

In December 2018, the trustee stated that it had issued the quotation in accordance with statutory timescales and to the correct address, and could not be responsible for the post once it had left its office, arguing that there was no maladministration on the part of the administrator.

Whilst TPO accepted that there was no mishandling of the original CETV request, it argued that there was maladministration in the handling of Mr N’s request for an update.

The pensions ombudsman, Anthony Arter, agreed that the trustee cannot be held responsible for the failings of the postal system, but stated that the administrators failure to respond to Mr N’s subsequent chasing of the quotation amounted to maladministration.

In response to the complaint, the trustee argued that there “cannot be maladministration for the trustee to fail to provide a document to a member, in circumstances where the trustee has no legal duty to provide that document to the member in the first place”.

However, Arter disagreed, stating that the trustee has a duty to act in the interests of the beneficiaries, a duty that it failed to comply with by failing to respond to a request for a copy of the CETV quotation within a reasonable timeframe.

Arter also disagreed with the argument that the trustee should not be at fault for failing to respond as it was experiencing an unprecedented level of member interaction.

He stated that whilst the scheme argued it had bought in as much additional administrative resource as possible, re-issuing a letter does not require specialist skills and, as such, it should have been within the trustee’s power to scale up operations and ensure this type of request was dealt with promptly.

The trustee also argued that its inaction was not the main factor in causing Mr N to miss the CETV deadline, and as such should not be culpable for any subsequent financial loss.

However, the ombudsman again disagreed with this argument, stating that whilst it is true that the trustee cannot be held responsible for the failure of the CETV to reach Mr N, the delays experienced subsequently caused him to miss the deadline caused the financial loss.

Share Story: