We regularly receive enquiries relating to pensions and investment disputes that have not been successfully resolved with the provider or administrator. One of the first questions to address is which is best body to refer a complaint to, if litigation is not appropriate. There are fundamental differences between the forums which can materially affect the outcome of a complaint. This article therefore takes a look at the three main organisations that consider pension and investment disputes.
The Pensions Advisory Service (TPAS): TPAS is traditionally used by individual members of work based pension schemes to review and mediate disputes which are not successfully concluded at scheme level under a scheme’s Internal Dispute Resolution Procedure. However, TPAS is a voluntary organisation and can consider complaints and concerns of personal pension holders and also in respect of State Pensions. TPAS is however limited, it cannot review or advise on investment advice and cannot award compensation.
The Pensions Ombudsman Service (the PO): This is an independent body funded by the DWP to investigate and determine consumer pension complaints relating to maladministration, breach of contract and trust, misrepresentation, poor advice and negligence. The PO determines complaints with reference to legal principles and has power to make binding decisions without any upper financial limit which are enforceable in Court. The parties to a dispute heard by the PO have a right of appeal on a point of law to the High Court. The PO will not consider disputes where the subject of the dispute occurred more than 3 years from the date of the complaint’s referral to the PO, although this period will run from the earliest date the complainant became aware or ought reasonably to have been aware of the matter.
The Financial Ombudsman Service (FOS): This is an independent body set up by parliament to investigate and determine consumer complaints relating to a broad spectrum of financial service products including pensions. The FOS determines complaints by reference to what is “fair and reasonable” and will consider the circumstances of the dispute, relevant law, codes of practice and industry practice standards to determine a complaint. The FOS can award up to £150,000 and recommend that a higher amount be paid. There is no right of appeal from the decision of an Ombudsman. A consumer has six months from the date a relevant business issues its Final Response letter to refer a complaint to the FOS. In addition, the FOS will not consider disputes, the subject of which occurred more than 6 years from the date of referral to the FOS or 3 years from the date the complainant became aware or ought to have been aware of the complaint.
Given that the PO and FOS can consider similar complaints there is an agreement (a Memorandum of Understanding) between these bodies which has operated to divide complaints between them. Consequently, the PO typically considers complaints relating to management and administration of pensions while the FOS considers complaints relating to the sale of pensions and investments. There is an element of cross over between the two bodies however and on some recent pension complaints heard by the PO and FOS on similar facts, starkly different results have been achieved.
Before even considering the merits of a pensions claim or complaint, there are important decisions to be made in deciding what is the appropriate forum and what are the applicable time limits. Our pensions specialist, Suzie Done, has expertise in dealing with these complex issues and is able to assist in negotiating the potential maze of pensions complaints. Contact Suzie on 01661 844185 or Suzie@clairecollinsonlegal.co.uk
