Out-Law / Your Daily Need-To-Know

Pension disputes: providers urged to keep members up to date

Out-Law Analysis | 15 Dec 2021 | 5:37 pm | 2 min. read

A recent decision by the UK’s Pensions Ombudsman (PO) in cases involving pension providers highlight the importance of investigating member complaints thoroughly.

Guidance recently published by the PO (2-page / 417KB PDF) encourages schemes to make sure members have access to up to date and accurate scheme information and to address all issues raised in a member’s complaint, showing each element has been fully and fairly investigated. The guidance states that steps like this can resolve disputes without the need for the ombudsman to be involved.

Thoroughly investigating member complaints

The PO dismissed a complaint brought by Mr H, who had experienced difficulties paying contributions into two stakeholder pensions he had set up for his sons using a Curve payment card. He claimed financial loss from lost investment opportunities. The PO was satisfied that the provider responded appropriately to Mr H’s complaint; instigated investigations to understand the root cause of the payments being rejected and, ultimately, provided a solution to the issue, albeit at some delay. In addition, any distress and inconvenience experienced by Mr H was so minimal as to not meet the PO’s threshold for a financial award.

The decision shows that the PO’s office will not focus solely on the circumstances giving rise to a complaint, but will also look carefully into how the provider has investigated the complaint and communicated with its customer.

Kemp Michael

Michael Kemp

Senior Pensions Technician

Recent Pensions Ombudsman guidance encourages schemes to make sure members have access to up to date and accurate scheme information and to address all issues raised in a member’s complaint

Mr H had attempted to make one-off payments into his sons’ policies using his Curve card, a type of ‘smart’ payment card which can be used to aggregate multiple debit and credit cards. On each occasion, the provider acknowledged receipt of the payments and confirmed the units purchased. However, the transactions were then declined by Mr H’s bank. After more unsuccessful payment attempts, the provider identified that the problem lay with the Curve card.

The Curve card was not on the provider’s list of denied payment cards, and so the provider did not know there was a problem at the point the payments were taken – only when they were subsequently declined. The PO acknowledged that it was unfortunate that the provider’s systems were not configured to deal with Curve transactions. However, the provider had recognised the issue and committed to review the situation, either blocking Curve cards at the start of the process or fully enabling them to be used to make payments.

Based on the communications from the provider and the incorrect findings of its initial investigation, the PO’s adjudicator was not satisfied that the provider had fully considered at the time whether the unusual payment method was valid. However, its willingness to review its payment systems to avoid similar problems occurring in future was a relevant factor in the PO deciding not to uphold the complaint.

The case is also a reminder of the £500 minimum threshold, payable for “significant” non-financial injustice, which applies before the PO will make this type of award. Where there is minimal distress or inconvenience; where this is of a very limited duration or on a single occasion; or where an apology by the provider would be adequate redress; the PO would consider this to be “nominal” non-financial injustice and an award would be unlikely. While Mr H experienced non-financial injustice in this case when the provider’s initial investigation did not provide the correct explanation, his distress and inconvenience was not sufficient to merit a monetary award.