Ombudsman Makes First Pension Liberation Rulings

The Pensions Ombudsman has finally ruled on three pension liberation complaints about blocked transfers after a year of deliberating over the claims.

The ombudsman is thought to have a backlog of around 100 pension liberation cases and these are the first rulings.

In each, the ombudsman has backed the refusal of pension providers to block transfer requests – but warned that they must be sure the receiving firms are scammers if they want his support in future cases.

The watchdog argues that suspicion and lack of information are not sufficient reasons to stop customers transferring their money.

In the three cases, providers Zurich and Aviva were ruled correct in blocking pension transfers as the receiving schemes were not pensions according to strict legal definitions.

Call for review

In the third case, Standard Life was also ruled correct in disallowing a transfer on the grounds a self-employed retirement saver could not transfer into an employment scheme because he had no earnings as an employee.

The ombudsman did explain that Standard Life could have allowed the transfer, but must review the case to decide whether to allow the switch.

In the only other pension liberation ruling last year, the ombudsman ordered a pension liberation scheme should transfer a saver out because the return on investment was not achieved.

“Savers risk losing all their money when transferring to these schemes, although there is no evidence this has happened in the three latest cases,” said a spokesman for the ombudsman.

The ombudsman also warned that if a retirement saver has a statutory right to transfer their cash, then despite warning them of the risks, providers would have to allow them to take their money to another provider.

Wrong paperwork

Meanwhile, the pension provider blocked from receiving funds in the Aviva case has pledged to take action against the company to force the transaction through.

Pension administrators Warwick and Eaton argue that the only reason the transfer could not proceed was due to a lack of formal documentation between retirement saver Sharon Jerrard’s employer and their scheme and not because they were a pension liberation firm.

Ms Jerrard wanted to move £5,369 out of the Aviva scheme.

“We will sort out the paperwork within a few days and go straight back with a formal request to transfer the money that Aviva will not be able to stand in the way of,” said a spokesman for the firm.

Warwick and Eaton said in a statement: “Bearing in mind that this determination is, based on the misconception that there is not a deed of participation, and therefore the relationship with the employer is undefined, a fresh application for the member will be submitted within days.