Waiting times a problem as demand for Pensions Ombudsman rises

The Ombudsman’s corporate plan 2022-25, published August 3, explained how, despite making significant improvements in productivity — increasing 6 per cent in 2020-21 and a 8 per cent during 2021-22 — rising demand and insufficient funding has led to customer waiting times becoming “increasingly unacceptable”.

It estimates that the existing caseload is around 2,000 cases above a “sustainable” level that would preclude customers waiting in queues for longer than three months, and the time taken to resolve cases has led to poor levels of customer satisfaction.

Writing in his foreword to the plan, Pensions Ombudsman Anthony Arter said: “We have already successfully increased productivity over the last two years, and we will continue to identify and implement further efficiencies.

Increased knowledge alongside the current economic impact on people’s personal finances means that demand for our service is likely to continue to increase

Anthony Arter, former Pensions Ombudsman

“However, these will not be sufficient to meet the increase in demand we anticipate, nor reduce the already lengthy waiting time for customers.”

He added: “That is why I am delighted that we have been successful in our Spending Review submission for additional funds. The increased budget includes ‘one-off’ funding for 2022-23 alongside an increase in budget over the next three years.

“The additional 2022-23 funding is being used to establish a new team, as part of a wider initiative to reduce the waiting time to sustainable levels.” 

The additional budget will allow the Ombudsman to recruit more staff, he explained, while cautioning that reducing waiting times while the number of complaints continues to rise “remains extremely challenging”. 

“We will continue to carefully monitor the impact on customer waiting times to determine the level of resource needed from 2023-24 onwards,” he said.

Funding secured in 2021 went towards the creation and work of the new pensions dishonesty unit, designed to investigate allegations of dishonesty and wrongdoing by trustees, managers and administrators, and additional funding means that the pilot scheme will continue into 2023.

“The pensions landscape continues to evolve; encouraging more people to save for their retirement, increasing people’s understanding of the options available and expanding protection against scams.

“This increased knowledge alongside the current economic impact on people’s personal finances means that demand for our service is likely to continue to increase,” Arter wrote.

“By the end of March 2025, we expect customer satisfaction with our service to have increased as customer wait times are driven down.

“This will be made possible through the additional staff our increased budget has made it possible to hire and through the new ways of working we will be trialling during 2022-23 which, if successful, will be rolled out across the organisation in the later years of the plan.”

‘Unacceptable’ waiting times

Demand for the Ombudsman’s services rose 11.7 per cent in 2021-22, above the 10 per cent forecast, resulting in a current caseload some 2,000 cases above a sustainable position in which “no customer is waiting in a queue for longer than three months,” the plan explained.

“To meet the increase in ‘business as usual’ demand and return our queues to a sustainable position will require TPO to close 8,800 pension complaints in 2022-23, compared to 5,221 pension complaints that were closed in 2021-22.”

This, it said, was an “extremely stretching” target, one which the service will “strive” to meet, though it has set its key performance indicators “based on increasing our closures to 6,800 in 2022-23 (a 32 per cent increase in output achieved from an 18 per cent increase in funding)”.

The need to reduce waiting times was crystallised by responses to customer and stakeholder feedback surveys between April 2021 and March 2022, which showed 63 per cent of 11,848 respondents were dissatisfied with how long it had taken the Ombudsman to deal with their complaint.

The corporate plan compared current scores with the key performance indicators for customer satisfaction set for 2021-22 and found that, though it exceeded the majority of its targets, it fell short in a number of areas.

In particular, the 2021-22 KPIs stipulated that 60 per cent of cases should be closed within 12 months of going to adjudication, but it was only able to close 44.8 per cent.

It aimed to score 57 per cent for “providing you with a good service”, but could only score 44 per cent, while the hoped-for 62 per cent score for “providing clear decision-making” was missed, the service only earning a 56 per cent rating.

As such, the service is prioritising recruitment throughout 2022-23 in order to strengthen its casework and legal teams, thereby increasing speed and capacity.

A new temporary team has been established to focus on “straightforward” cases and free up permanent staff to focus on “more complex and demanding” claims.

“In addition to the augmented casework teams, we will continue to realise further efficiencies through additional improvements to our operating model.

“This includes substantial changes to early closures that will require a significant focus of management effort and support to staff that will continue into the first part of 2022-23, particularly as new staff join the organisation,” the plan explained.

Finally, the Ombudsman intends to run a targeted recruitment campaign throughout 2022-23 to increase the number of volunteers on its early resolution service, which — pending evaluation — will then be extended in 2023-24 and 2024-25, after which it is hoped the current rate of increase in demand will have dropped to a more normal five per cent.

Pensions dishonesty unit makes progress

Funding to trial the new pensions dishonesty unit was secured in 2021, and is distinct from the operations of the Fraud Compensation Fund, as money repaid to members under the PDU will come directly from those responsible for crimes and misdemeanours.

Since July 2021, the pilot programme has seen experienced staff allocated internally from the Ombudsman’s casework and legal teams, and then back-filling those vacancies. 

The corporate plan states that “good progress” has been made, with the caveat being that, though dedicated staff are now working on “specialist-identified cases”, the complexity of these cases means “it will take time before we start to see any tangible results”.

Funding has now been secured to extend the trial until March 31 2023, and a review of the scheme, scheduled for November this year, will determine whether the work should continue, and so whether additional funding will be needed to operate the unit through 2023-24 and 2024-25.