A brief update on the Pensions Ombudsman
It's over a year since Anthony Arter took over the helm at the Pensions Ombudsman. Now seems an opportune time to look at some of the changes he has made to the organisation, the source of most complaints over the last year and where future complaints are likely to arise.
What does the Pensions Ombudsman do?
The Pensions Ombudsman:-
1. Is an independent organisation established by law to investigate complaints about administration in occupational and personal pension schemes.
2. Looks at the facts without taking sides and has legal powers to make decisions which are final, binding and enforceable in court.
3. Provides an entirely free service.
4. Unlike The Pensions Advisory Service (TPAS) which can only effect a resolution through persuasion and conciliation, has similar powers to a court of law. The Ombudsman's final decision can only be changed by appealing to the appropriate court on a point of law.
An approach to the Pensions Ombudsman is usually only made after a full investigation by TPAS. The Pensions Ombudsman will decide a complaint or dispute, totally independent of any opinion which TPAS may have made.
Pension Ombudsman Investigations take on average 10 months to complete. Around 40% of complaints determined by the PO were upheld at least in part. Complaints determined by an Ombudsman represent 37% of all completed investigations.
1. Creation of teams to deal with complaints according to their level of complexity and specialism, for example; education, local government and health.
2. Investigators are now called "adjudicators".
3. Case completion has been simplified to informal adjudicator decisions called "opinions", which if not agreed to by all parties are followed by Ombudsman "preliminary decisions" and "determinations".
4. Opinions are anonymised unless the Ombudsman considers it appropriate to do otherwise.
5. Increased online presence and plans for complaint handling online whereby complainants and respondents will be able to track the progress of the complaint.
Key source of complaints
1. Personal Pensions (and in particular Self invested Personal Pensions) account for most complaints; 46% which is up from the previous year's 25%.
2. Pension liberation – accounts for 20% of completed investigations.
3. Misquotations/misinformation and failure to provide information or act on instructions.
4. Payment of ill-health benefits.
5. Refusal/failure to pay or late payment.
7. Incorrect benefit calculation.
8. Interpretation of scheme rules.
9. Death benefits.
Anticipated future source of complaints
11. Small-Self-Administered Schemes and their use as a vehicle for pension liberation.
12. Reconciliation of Guaranteed Minimum Pensions.
13. Changes to public sector pensions and the new pension freedoms.
14. Automatic enrolment.
In line with this experience it behoves employees and trustees to again consider whether their procedures for providing quotations and information, granting ill-health benefits and dealing with complaints are robust and accurate. Also, given the recent pension liberation scams, it would be sensible to check that suitable procedures are in place to identify and deal with suspicious requests.