Pension Trustees Have To Pay For Transfer Delay

The Pension Ombudsman has ordered trustees to pay compensation and damages to a retirement saver for being too slow in transferring his pension.

Although pension rules give providers up to six months to complete a transfer request to another scheme, the ombudsman told Optimum Capital Ltd (OCL) that he felt transferring Phillipe Pollett’s pension within a month was ‘entirely reasonable’.

Pollett had asked the trustees to switch his fund to Legal and General. He complained to the ombudsman claiming compensation for lost fund growth.

Anthony Arter, the ombudsman, upheld his complaint and ordered OCL to pay compensation plus damages of £500 to Pollett for ‘distress and inconvenience’.

OCL blamed the delay on problems with their fund administrator Tudor Capital Management.

Staff problems

In April 2010, Tudor was barred from acting as pension scheme trustees when two of the firm’s directors were charged with fraud.

Following this incident, OCL appointed several administrators, trustees and lawyers.

The firm claimed this turnover of senior staff caused the problems that led to the delay in transferring Pollett’s pension.

However, the ombudsman pointed out that the trustees and not the administrators were responsible for seeing the transfer through and that OCL had held this role throughout the time other senior staff came and went.

“They should have acted reasonably, especially as Legal and General had quickly returned the discharge form,” said Arter.

More and more bad news for UK pension pots keeps appearing, the outlook is grim

No right

“The form was sent on July 9, 2013 and my view is the transfer could have taken place in August.”

The ombudsman also criticised OCL for asking Pollett to sign a disclaimer confirming he would not take legal action against the scheme if the Tudor directors were convicted of fraud.

“They had no right to try to forestall future legal claims against them as they had no legal right to refuse the transfer,” he said.

Pollett did have a request for compensation to pay for independent financial advice refused as the ombudsman ruled he could have obtained the same advice for free from the Pension Advisory Service.

Stay Connected

Latest News

Economic Impact Payments for US Expats

The US government is paying millions of dollars into the bank accounts of American expats as coronavirus economic impact payments and this guide will...

HMRC Explained

HMRC is short for Her Majesty’s Revenue and Customs. The HMRC collects the taxes and customs duties that the British government spends...

Difference Between Residence and Domicile

For British expats, their residence and domicile determine how much tax they are likely to pay, both in the country where they...

QROPS, Qualifying Recognised Overseas Pension Scheme

QROPS is a type of pensions that were designed to cater for the needs of British pension holders that move out of...

Where Do British Expats Live?

More than 5.5 million people from Britain live overseas and leave the country at a rate of around 2,000 a week.

Living In The Philippines, A Guide for Expats

Brilliant weather, a low cost of living and friendly, English speaking people makes The Philippines a popular destination for British expats.

LEAVE A REPLY

Please enter your comment!
Please enter your name here