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.
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.
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“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.