The Pensions Ombudsman (TPO) has upheld a complaint against S Ltd after the company was unable to provide any legal justification for refusing to transfer the complainant's benefits or a reasonable explanation for the delay in processing the transfer.

The complainant, Ms N, said that S Ltd unreasonably delayed the transfer of her pension benefits, which were held in an individual policy under the scheme.

Ms N also claimed the delay caused her an investment loss and prevented her from drawing from her benefits.

S Ltd was ordered to pay Ms N £1,000 for the “distress and inconvenience” that she suffered.

Mr N, Ms N’s ex-husband, on behalf of S Ltd, completed a transfer information form to request a quotation for transferring benefits into the scheme.

S Ltd confirmed to Scottish Widows (the scheme) that benefits held with Scottish Mutual for Ms N was to be transferred into the individual policy, which Scottish Widows received.

However, Ms N completed a form indicating her wish to transfer benefits to a scheme administered by AJ Bell.

Scottish Widows issued a policy summary valuing the benefits at £11,166.56 and then provided an updated summary, stating total contributions of £5,809.30 and a policy value of £12,283.54.

Then, Ms N submitted a new form to transfer benefits to Interactive Investor and Mr N, on behalf of S Ltd, authorised the transfer.

Scottish Widows transferred £13,851.62 to Ms N’s Interactive Investor self-invested personal pension (SIPP).

S Ltd claimed that Ms N was not employed by S Ltd when the policy was set up and Mr N did not sign the paperwork.

In addition to this, S Ltd claimed the transfer was delayed because it had to carry out legal due diligence and establish the history of the policy.

Pensions ombudsman, Dominic Harris, said that S Ltd’s refusal to authorise the transfer of Ms N’s benefits out of the individual policy, until the authorisation date, amounts to maladministration.

“S Ltd alleged that fraudulent activity took place when the policy was set up but has provided no evidence to support this allegation," he said.

“S Ltd has since given authorisation for the transfer, without further explanation as to the change of position.”

However, Harris stated that the amount of Ms N’s benefits transferred to her Interactive Investor SIPP was greater than the amount calculated using the process set out in section 10 of the 1996 regulations.

Given this, he said: “I find that Ms N has not suffered a financial loss according to the 1996 regulations. So, she is not due any redress.”

However, Harris said Ms N has suffered “distress and inconvenience” because of S Ltd’s maladministration.

“The transfer of Ms N’s benefits took almost 19 months to be completed, following the initial request submitted to S Ltd’s legal representative.

“This is far longer than was acceptable given the circumstances of the case and was despite S Ltd being informed that it had presented no evidence of a right to prevent the transfer.

“I find that this amounts to serious distress and inconvenience.”

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