When the pensions ombudsman published its first determination on a pensions liberation case late last year, I blogged that the key cases for schemes would be where trustees had blocked suspect transfers. The first few of those have now been made public.
The determination covers three cases: Mrs Kenyon with provider Zurich, Mrs Jerrard with provider Aviva and Mr Stobie with provider Standard life.
In all of these cases the members' attempts to transfer out of their schemes had been blocked by the provider.
The ombudsman concluded with this, rather backhanded, justification of the providers' decision. From its summary release on Friday:
Despite this, the ombudsman went on to say: "In two of the cases that the FCA regulated, providers went beyond the Pensions Regulator's guidance."
The determination covers three cases: Mrs Kenyon with provider Zurich, Mrs Jerrard with provider Aviva and Mr Stobie with provider Standard life.
In all of these cases the members' attempts to transfer out of their schemes had been blocked by the provider.
The ombudsman concluded with this, rather backhanded, justification of the providers' decision. From its summary release on Friday:
Despite this, the ombudsman went on to say: "In two of the cases that the FCA regulated, providers went beyond the Pensions Regulator's guidance."
Suspicion of scams may justify delay
The most important part of the decision for schemes could be the following:
Now that's cleared up, let's take a closer look at the cases.
In the cases of Kenyon and Jerrard, the ombudsman found there was no statutory right to transfer on the grounds that the schemes each was attempting to transfer to "did not identify a clear class or 'description' of employments of the people that they were to provide benefits for".
The scheme intended to receive Stobie's pot was an occupational scheme, but he was now an 'earner' in relation to it, meaning the transfer would not have secured 'transfer credits'.
An easy way around for scammers?
Adrian Kennett, director at independent trustee company Dalriada Trustees, pointed out the grounds on which the transfers were refused would be quickly incorporated into a fraudster's strategy.
He said: "That is just one layer of the complexity here... it's almost knocked out on a technicality." Those creating liberation schemes were "constantly innovating", he said.
"These people are very clever and may well have already worked their way around that technicality. Schemes need to be very careful."
The ombudsman acknowledged as much, ending its announcement with this warning:
That last sentence will hardly leave trustees and providers feeling stronger in relation to these requests.
