Police Pension Scheme · CAS-30919-M5H4

CAS-30919-M5H4

Ombudsman’s Determination Applicant Mr T

Scheme Police Pension Scheme (the Scheme)

Respondent Equiniti Pension Solutions (Equiniti)

Outcome

Complaint summary

Background information, including submissions from the parties

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3 CAS-30919-M5H4 Adjudicator’s Opinion

The decision to invest in the Trafalgar Fund was taken by Mr T with advice from his IFA. Equiniti was not a party to that decision and at the time that the transfer request was received, it was not a requirement for Equiniti to investigate how any transferred funds were to be invested in a new pension scheme.

Mr T has also referred to TPR’s guidance of April 2015 and says that Equiniti failed to adhere to the principles contained therein. Equiniti says that Mr T’s transfer request predated the implementation of TPR’s guidance, and the transitional arrangements did not require it to take any further action, even though the CETV was paid after the implementation date of 6 April 2015. The Adjudicator was of the view that Equiniti complied with the transfer checks in place at the time.

Mr T had a statutory right to a transfer and as the checks that Equiniti carried out did not give rise to any warning signal about STM or the Plan, it had no option other than to pay the CETV.

In the course of the investigation, the Adjudicator asked Mr T his reasons for wishing to transfer to a QROPS and whether he had received any incentive for transferring. Mr T has explained that he was told that if the pension was in a QROPS and he was to die, the whole pension pot could be transferred to his wife. His wife cares for his children and would only receive a state pension at the state pension age. He had no intention of leaving the UK upon his retirement and he was also told that he could access the new pension from the age of 55. As he did not know what age he could retire at under the CARE 2015, the new police pension scheme, and believed that he would be working until 60, he thought 55 was a better age to retire.

Mr T also received an incentive of £2,000 to transfer and he was told it would be taken from his pension pot upon completion of the transfer. It was explained to him

4 CAS-30919-M5H4 that there was a small percentage that could be removed in the transfer procedure, resulting in the amount above being paid out, tax free.

Looking at the information that was provided to Mr T prior to the transfer it does seem that there was some misinformation given. As far as the Adjudicator was aware Mr T’s wife would be eligible to receive a widow’s pension from the Scheme if he were to die before retirement age while still working for the Police. Also, the payment of £2,000 from the transfer payment is not allowed under HMRC’s rules and Mr T may be liable to a tax charge of 55% on the amount received. If Mr T had investigated the claims made by the adviser at the time, he may have made a different decision about transferring.

Although the Adjudicator had every sympathy for the position that Mr T now finds himself in, he was of the view that there were no grounds as to why Equiniti should be held liable for the loss he has incurred through his investment in the Trafalgar Fund.

Mr T did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr T provided his further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr T.

Mr T has asked why has the Adjudicator decided that he received the scorpion warning? He did not receive the scorpion leaflet/warning and wishes to know what evidence Equiniti has produced to show that it provided the leaflet.

Mr T has also asked why Equiniti’s check of the QROPS was sufficient given that it had been given an outdated letter from STM in 2010 as proof of being on the register. Finally, Mr T wants to understand the reasoning behind why the Adjudicator was of the view that the complaint is different to that of Mr N [PO-12763] which was a similar complaint which was upheld.

Ombudsman’s decision Mr T has asked why the Adjudicator decided that he received the Scorpion leaflet and what evidence Equiniti has produced to show it was sent. Equiniti say the Scorpion leaflet was included with the transfer quotation along with the warning statement outlined in paragraph 12 above. The transfer quotations were issued to Mr T’s IFA.

The Adjudicator cannot say categorically that the Scorpion leaflet was included with the transfer quotation but given that the issuing of Scorpion leaflets was required from February 2013 it would have been a well established standard practice for this to be included. I therefore agree that, on the balance of probability, it was included. It may be that the IFA did not pass this on to Mr T, but that is not the fault of Equiniti.

Further, the Adjudicator considered whether the receipt of this Scorpion leaflet would have made any difference to the decision that Mr T made to transfer. As Mr T has said that his reasons for transferring were more to do with a wish to retire earlier than allowed for under the Scheme the Adjudicator concluded that even had Mr T received

5 CAS-30919-M5H4 the Scorpion leaflet it is more likely than not that he would have proceeded with the transfer.

Mr T has asked why Equiniti’s check of the QROPS was sufficient given that it had been given an outdated letter from STM in 2010 as proof of it being on the register. Equiniti says that the STM Plan was on HMRC’s QROPS list at the point of transfer. HMRC maintains a list of QROPS on its website. The list is updated regularly by HMRC and the STM Plan is currently on the list and has remained on the list since 2010. The check that Equiniti therefore carried out at the time was in line with the level of checks required.

Finally, Mr T wants to understand the reasoning behind why the Adjudicator was of the view that his complaint differs to that of Mr N [PO-12763]. I would point out that each complaint is looked at on the facts of the case and is not influenced by previous Determinations that I have made.

Mr N’s case is similar in that it relates to a complaint against the Police Pension Scheme. But there are differences in Mr N’s complaint, namely: that the pension scheme that Mr N transferred to, the London Quantum Scheme was a recently established occupational scheme as opposed to a QROPS; it was sponsored by a newly registered employer geographically distant from Mr N; and the Authority failed to check certain features of this new scheme. Indeed, it subsequently transpired that the London Quantum Scheme was a scheme of concern and that several providers had blocked transfers to it.

The facts of Mr T’s complaint are different as the Plan and its provider STM are still valid and the QROPS is still on HMRC’s list of approved QROPS. The reason for Mr T’s loss is the failure of the Trafalgar Fund and at the time of the transfer, Equiniti was not required to investigate how any transferred funds were to be invested in a new pension scheme.

I do not uphold Mr T’s complaint.

Anthony Arter

Pensions Ombudsman 18 November 2021

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