The past quarter has seen further determinations from the Pensions Ombudsman relating to the issue of pensions liberation. A key theme of the Ombudsman's determinations to date is his view that publication of the Pensions Regulator's guidance on pensions liberation in February 2013 was a key "turning point" when assessing the behaviour of a transferring scheme.
In a case which involved a transfer in October 2012 to what turned out to be a suspected pensions liberation arrangement, the Pensions Ombudsman rejected the member's complaint that the transferring scheme provider had failed to "carry out a proper procedure" when making a transfer on the member's instructions. The Ombudsman stated, "I cannot apply current levels of knowledge and understanding of pension liberation/scams or present standards of practice to a past situation." The Ombudsman also acknowledges that it would be reasonable for schemes to need some time to update their practices and literature following publication of the February 2013 guidance. Thus he rejected a similar complaint involving a transfer made in March 2013 following a transfer request made in January 2013.
The Ombudsman has also rejected a complaint by a member regarding a refusal by a scheme provider to make a transfer when requested to do so. On the facts, the Ombudsman held that the member had no statutory right to a transfer. He held that the scheme rules gave the provider adiscretion to make the transfer, but the provider had identified the presence of a number of factors often associated with pensions liberation and was entitled to refuse to exercise its discretionary power. Though not upholding the member's complaint, the Ombudsman was critical of the pension provider's failure to explain its decision to the member.
The Ombudsman's decisions will provide comfort for schemes that have made transfers in the past that the Ombudsman will not seek to apply current standards of due diligence retrospectively to the period before the Pensions Regulator issued its pensions liberation guidance. With regard to complaints regarding a refusal to make a transfer, complaints about the way trustees exercise their discretion in cases where the member has no right to a transfer value may perhaps become the next "battle ground".