Traction Seabert Co Ltd Rbs · CAS-36358-M3K4

CAS-36358-M3K4

Ombudsman’s Determination Applicant Mr T

Scheme Traction Seabert & Co Ltd RBS (the Scheme)

Respondent PIM Trustees Limited (PIM)

Complaint Summary

Summary of the Ombudsman’s Determination and reasons The complaint shall be upheld against PIM because it has failed to meet Mr T’s reasonable requests for payment of income drawdown from the Scheme. Furthermore, Mr T has suffered a severe level of distress and inconvenience due to the delay.

Detailed Determination Material facts CAS-36358-M3K4

13. A pension scheme return for the Scheme, dated 31 March 2019, was sent to Mr T by PIM. This showed an asset of £100,000 named Southbank as an investment and total assets of £133,697. 2 CAS-36358-M3K4 Summary of Mr T’s position

14.

Summary of PIM’s position

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PIM has certain fiduciary duties that it must adhere to. These include, but are not limited to, the following:-

• Acting in accordance with the trust deed and rules;

• Acting prudently, responsibly and honestly;

• Acting in the best interests of scheme beneficiaries; and

• Acting impartially.

Mr T wrote to Mr Woolley several times throughout 2019 to request payment as per earlier drawdown payments that PIM had agreed to and paid. But the transfer of money to him has yet to take place. Mr Woolley has referred, in the February Letter, to difficulties with Scheme funding, as Mr T’s funds are seemingly tied up in shares in Southbank, of which Mr Woolley is the Director. This raises concerns over whether Mr Woolley is acting in the best interests of members of the Scheme, and his impartiality.

PIM is responsible for ensuring that there is sufficient liquidity in the Scheme assets for payments as they fall due. Moreover, as sole director of PIM, Mr Woolley has responsibilities that are entirely separate from his responsibilities as Director of Southbank. This means that PIM must ensure that the Scheme has sufficient capacity so that Mr T’s drawdown request is processed within a reasonable timeframe.

29. Other than via the February Letter, PIM has not updated Mr T. It has not produced any cogent reasons why Mr T’s pension drawdown has not yet been paid. Mr T has reasonably requested payment of part of his fund as income drawdown. Taking into account industry good practice, I consider that the drawdown payment should have been made by 19 February 2019; one week after Mr T had submitted his request for payment of his fund.

31. I find PIM’s failure to pay Mr T inexcusable. PIM should pay Mr T the £30,000 income he has requested. 4 CAS-36358-M3K4

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5 CAS-36358-M3K4 39. However, despite the above restriction, Regulation 7(2) of the Investment Regulations still requires trustees of schemes with fewer than 100 members to “have regard to the need for diversification of investments, in so far as appropriate to the circumstances of the scheme”.

40. Based on the information that I have received to date, it is difficult to see how PIM could reasonably claim that it has met the requirement under Regulation 7(2) of the Investment Regulations, given that £100,000 of the Scheme’s assets totalling £133,697 were invested in the same company.

42. I cannot at this stage see how, in investing so much of the Scheme’s assets in Southbank, PIM could be considered to have complied with either of the requirements set out in paragraph 41 above.

43. I direct that within 21 days of the date of the Determination PIM shall make the following payments:-

• £30,000 to Mr T from the Scheme in respect of the income drawdown he has requested.

• £2,000 to Mr T for the severe distress and inconvenience he has experienced.

Anthony Arter

Pensions Ombudsman 23 October 2020

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