TPO upholds late payment complaint against Bradford & Bingley

The Pensions Ombudsman (TPO) has upheld a complaint against Bradford & Bingley Trustees, clearing the Clydesdale Bank Scheme as a result.

‘Mr N’ complained that either, he was entitled to a deferred pension in the Clydesdale Bank Scheme and the trustees were improperly refusing to pay him, or that his deferred pension had been transferred to the Bradford & Bingley Scheme.

If the latter proved true, Mr N stated that the Bradford & Bingley trustees had failed to allow for additional benefits to be available from this transfer in when calculating the cash equivalent transfer value (CETV) of £25,476.58, which was paid to the HSBC Pension Scheme on 20 April 1995.

Following evidence from HMRC, TPO found that the funds had been transferred, subsequently ordering Bradford & Bingley Trustees to calculate the deferred pension available to Mr N and inform him of this accordingly.

Should Mr N then elect to receive a backdated retirement pension and lump sum from the scheme, then the firm shall also calculate and pay simple interest on the payments due.

Mr N had contacted Capita, the administrators of the Clydesdale Bank Scheme, in April 2017, to enquire about the deferred pension he had accrued between 1975 and 1986.

However, Capita stated that it had no details of his membership, and subsequently used its Guaranteed Minimum Pension (GMP) checker to confirm that, according to HMRC, Mr N was no longer entitled to a GMP in the Clydesdale Bank Scheme.

In April 2018, Capita then informed Mr N that it could not find any details of his deferred benefits in the scheme from paper files either, and whilst Mr N escalated the complaint to the scheme’s internal dispute resolution procedure (IDRP), it was not upheld at either stage.

However, stage two of the IDRP process found that available evidence indicated Mr N had transferred his pension rights elsewhere.

Furthermore, as part of TPO’s investigation, it contacted HMRC to determine who was now responsible for paying the GMP which Mr N had accrued with the Clydesdale Bank Scheme.

On 27 September 2019, HMRC confirmed that liability accrued with the scheme between 6 April 1978 and 1996 was indeed transferred to the Bradford and Bingley Pension scheme in 1991.

This liability was then transferred to the HSBC Bank Pension Scheme, and then later, as part of a Change of Responsibility Paying Authority, transferred again to the HBOS Final Salary Pension Scheme.

In a letter dated 26 November 2019, the current administrators of the Bradford & Bingley Scheme, Deloitte, stated that it did not have any record of a transfer of benefits from the Clydesdale Bank Scheme.

It also clarified that it could not comment on the transfer of contracted out liabilities from the Clydesdale Bank Scheme to the Bradord & Bingley scheme because there was no details of such a transfer.

Though it clarified that if Mr N had any documentation concerning the transfer, Bradford & Bingley Trustees would “consider the matter further”.

The adjudicator stated that Bradford & Bingley Trustees had "more likely than not" failed to allow for the transferred in benefits when calculating the CETV for Mr N, emphasising that this oversight "clearly constituted" maladministration on the part of the firm.

In her decision though, deputy ombudsman, Karen Johnston, clarified that she fully appreciated Bradford & Bingley Trustees’ point of view, explaining however, that she cannot "disregard evidence" supplied by HMRC.

In her decision, Johnston stated: “Having examined all the evidence submitted by the parties involved carefully, it is my opinion that Mr N’s deferred pension rights in the Clydesdale Pension Scheme were, on the balance of probabilities, transferred to the Bradford & Bingley Scheme in April 1995.”.

She explained that, according to HMRC records, the pension which Mr N is currently receiving from HBOS Final Salary Pension Scheme includes the GMP accrued whilst he was an active member of the Clydesdale Pension Scheme, which could only happen as a result of the deferred benefits initially being transferred to the Bradford & Bingley Scheme.

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