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Communication with members key to early dispute resolution, says UK Pensions Ombudsman

Out-Law Analysis | 23 Dec 2021 | 1:07 pm | 4 min. read

The UK’s Pensions Ombudsman (TPO) has recently published new guidance on communicating with pension scheme members, noting that early communication can avoid complaints to the body.

The guidance on communication (2 page / 497KB PDF) forms part of a series of publications issued in response to stakeholder feedback asking for more online guidance materials.

TPO said it often sees disputes and complaints stemming from poor communication and failings in customer service. It highlights simple steps that can be taken to resolve pension disputes and complaints without the need for TPO to be involved.

There is much that schemes can do at an early stage to avoid a complaint escalating and becoming costly and time-consuming to resolve, and TPO’s new guidance is helpful in drawing these points together.

Under the current ombudsman, TPO has become increasingly focused on early resolution of disputes, rather than formal investigations leading to a determination. According to TPO’s latest annual report and accounts (114 page / 2.74MB PDF), only 6% of the complaints closed by TPO in 2020-21 ended in a formal determination by the ombudsman.

The body has introduced an enquiries team to resolve issues in a single transaction where possible – many contacts are resolved by explaining how pensions work, sorting out misunderstandings and managing people’s expectations

Meanwhile TPO’s Early Resolution Service aims to resolve disputes informally, with the help of dedicated caseworkers and volunteers. In 2020-21, over a third of complaints dealt with by the Early Resolution Service were closed by providing a robust explanation to the customer, without needing to contact any other parties.


Communication tips

The guidance focuses on simple communication tips which can help avoid complaints being made to TPO.

Well-run schemes providing good customer service on a day-to-day basis are less likely to face member complaints. But TPO acknowledges that things inevitably go wrong from time to time and, when they do, how a scheme handles member complaints can make a real difference to the outcome.

Goldstone Hayley

Hayley Goldstone


There is much that schemes can do at an early stage to avoid a complaint escalating and becoming costly and time-consuming to resolve

The tips cover steps schemes can take before complaints arise, as well as recommendations for how to handle complaints to avoid them escalating.

On a day-to-day basis, TPO believes schemes can help avoid complaints arising in the first place by:

  • making sure members have access to up-to-date scheme information that is accurate, clear and concise;
  • communicating scheme changes clearly to members, and making sure administrators are aware of the changes;
  • complying with legal requirements; and
  • avoiding delays, complying with internal policy or service legal agreements, keeping members informed and explaining delays or why a response cannot be given.


Of course, mistakes do happen. TPO acknowledged in one recent case that although it would be nice to think mistakes never happen, “inevitably they sometimes do”.

TPO is sympathetic to genuine errors where the scheme takes action to put things right – not just for individual members affected, but also by reviewing their own systems and processes to try to ensure future errors are less likely. For example, in another recent case a pension provider’s willingness to review its payment systems was a relevant factor in TPO’s decision not to uphold a member’s complaint.

Where mistakes are made, the ombudsman will consider the way a scheme or provider has responded. TPO’s adjudicators will consider the timeliness of the scheme’s response, how it has communicated with the member, and how it has carried out its investigation into the complaint and sought to put right any maladministration or injustice.

It is important that schemes have robust processes for handling member complaints and keep accurate records of the steps they are taking to resolve disputes. TPO expects schemes to clarify the complaint, as well as the outcome the member is looking for – which may not be clear. TPO wants investigations to address, fully and fairly, all the issues raised by the member, so schemes need to document carefully the steps they have taken during an investigation.

TPO will criticise schemes for failing to take a proactive approach to investigating disputes. In a recent decision, TPO said it expected the pension provider to work proactively with the administrator to establish loss incurred by the member and rectify its error.


Effective complaints handling

TPO’s new guidance recommends other steps schemes can take to handle complaints more effectively. These involve both being empathetic and listening to the member, which can prevent an issue escalating into a dispute, but also being able to manage expectations robustly.

Communication is key: if a scheme cannot do what the member is asking, it can help by explaining why, using clear language and avoiding unnecessary jargon.

Many disputes arise because pensions are complicated and members do not always understand how their scheme operates. Even if schemes rules or policy terms are clear and the administrators have complied with them, disputes can arise when a member does not understand those rules. It can help if someone takes the time to explain how the scheme works.

TPO says schemes should accept responsibility, noting: “If something has gone wrong, and you can put it right, do so and do not be afraid to apologise”. There are many cases where schemes have apologised or offered members ex gratia payments when things have gone wrong, and TPO has considered this to be an appropriate remedy.

If complaints do escalate, TPO wants schemes to provide information to its caseworkers as soon as possible – or explain why it may take time. TPO is seeing rising demand for its services but is focused on resolving complaints more efficiently and sets itself targets for resolving cases within specified timeframes. Schemes should be aware that TPO’s corporate plan for 2021-24 (26 page 568KB PDF) made it a key priority over the coming year to reduce customer journey times – and we expect TPO will look to schemes to help it meet this goal.


More guidance from the Ombudsman

The new guidance also reminds schemes that TPO’s annual report details the top 10 topics for complaints each year, and includes summaries of some completed cases. These often carry useful lessons for trustees, pension providers and administrators and are well worth reviewing.

Misquoted benefits or general misinformation is usually one of the top three topics for complaints concluded by the adjudication teams and TPO. This highlights the need for schemes to ensure their communications are accurate and can be clearly understood by members.

TPO’s website now has a dedicated section on How to Avoid the Ombudsman. This includes guidance on common complaint areas, including ill health pensions, unpaid pension contributions and death benefits, with links to relevant TPO publications and case studies which may help schemes resolve complaints themselves.