On the go: The trustees of the old British Steel Pension Scheme have been ordered to pay out to a steelworker, after “maladministration” meant he received a pension transfer lower than he could have done.
The steelworker complained to the Pensions Ombudsman after multiple requests to chase a missing cash equivalent transfer value went unanswered by BSPS administrators.
As a result, the CETV expired and the steelworker was unable to transfer out of the scheme on the terms initially given to him. He later transferred out on a lower CETV.
Ombudsman Anthony Arter found there was “maladministration” when it came to the handling of the steelworker’s request for an update on his transfer value.
He said: “The trustee has a duty to act in the interest of the beneficiaries. By failing to respond to a request for a copy of the CETV quotation within a reasonable timeframe, I find that it failed to comply with this duty.”
The problem first arose when the steelworker, known as Mr N, requested a CETV quotation in August 2017 after resigning from Tata Steel and becoming a deferred member of BSPS.
In both September and October, Mr N emailed the administrator of BSPS chasing his quotation.
It was a busy time for the scheme in October, as thousands of BSPS members were asked to decide by December 2017 whether to move their defined benefit pension pots to a new plan, BSPS II, or stay in the existing fund, which was then moved to the Pension Protection Fund as part of a restructuring of pension liabilities.
BSPS wrote to Mr N in November providing a CETV of £26,653, which was guaranteed for three months. But Mr N said he never received this letter.
He attempted to get in contact with BSPS on several occasions, until he finally got a reply in February 2018 telling him the expiry date for the CETV had now passed and that under the rules he could not receive another one within the same year. As a result, Mr N was unable to proceed with the transfer of his benefits out of the BSPS.
In April 2018, BSPS II commenced and Mr N transferred into it. As a result, he was able to request a new quotation, and transferred out in June.
The CETV was £24,568, which was £2,067 less than the previous quotation provided in November 2017.
Mr N complained to the trustee, who said it “had been unable to respond to member queries as quickly as it normally would and accepted that its phone lines had often been engaged”.
However, the trustee argued it had acted within statutory requirements as it provided the CETV on time, and did not agree that Mr N had suffered a financial loss.
Ombudsman Mr Arter dismissed the trustee’s excuse that it was busier than usual due to dealing with requests on the back of the move to BSPS II.
He said reissuing a letter does not require specialist skills, and so it should have made sure it dealt with this request promptly. He was also satisfied that the maladministration caused Mr N to suffer financial loss.
As a result, the trustee must now contact the receiving scheme and ask it to calculate the current fund value as if the original CETV had been used. It must then compare this to the actual current fund value and pay any difference into the new scheme. It must also pay £500 for the distress Mr N experienced.
This article originally appeared on ftadviser.com
