Our previous editions of Pensions Priorities and Pensions Pieces contain articles in relation to pensions liberation, one of the most high profile and problematic issues currently facing the pensions industry. Pensions liberation is usually facilitated by an individual transferring their benefits to a pensions liberation vehicle (e.g. a 'bogus' pension scheme set up just for that purpose). The Pensions Regulator, in particular, has urged schemes to exercise caution when dealing with transfer requests in case they are being made in the context of a pensions liberation situation. However, that does not overcome the basic legal position which is that members have, in certain circumstances, a statutory right to transfer their benefits if they so wish. A number of pension schemes, suspecting pensions liberation is involved, have resisted complying with transfer requests and members have brought Pensions Ombudsman (‘PO’) claims as a result.
The PO's office issued an update in February in relation to these cases it is currently dealing with and said that it is likely to reach a decision in April/May in relation to the initial complaints it received. The outcome of these decisions will be important as they will bring some clarity in relation to the implications for pension schemes about their actions in this area, particularly given the legal position about transfers that we have mentioned above. We suspect that it is unlikely to be the end of the story if the decisions reached will cause difficulty for the pensions industry.