Out-Law Analysis 2 min. read

Pensions disputes: Ombudsman notes limits of provider responsibilities


A recent determination by the UK Pensions Ombudsman (PO) confirms the limits of a pension provider’s responsibilities where a member opts to transfer some of their savings to their own small self-administered pension (SSAS).

The PO dismissed a complaint brought by Mr E (14-page / 279KB PDF) against his pension provider, who he blamed for “avoidable delays” to the transfer of his funds to another pension arrangement. Mr E estimated that he had suffered losses of over £103,000 because he was unable to invest the transferred funds earlier. Mr E also brought a complaint against Mrs D, his ex-wife and fellow managing trustee of the scheme.

Mr E and Mrs D were members and managing trustees of an SSAS with a company they had jointly established as the scheme employer. The couple divorced in 2007. Part of Mr E’s pension was awarded to Mrs D under a pension sharing order (PSO), which was not immediately implemented. The provider sent a letter to Mrs D asking for her intentions with regard to the pension credit under the PSO, and for her to start processing the transfer of her share to another arrangement. Progress on PSO implementation stalled until 2016, when the provider requested a letter of instruction signed by Mr E and Mrs D as managing trustees.

In March 2019, Mr E renamed the principal employer of the scheme.

That same year, Mr E set up a self-invested personal pension (SIPP) into which he proposed to transfer his scheme benefits. However, he was told by the provider that the transfer could not be made until the PSO had been implemented including, for example, making an amendment to the scheme to allow pension sharing. Mrs D was initially reluctant to sign the deed of amendment and questioned the change of name of the principal employer, and the provider recommended the parties took financial advice before signing. Eventually the amendment was made, the provider implemented the pension sharing order and Mrs D signed paperwork enabling the transfer of Mr E’s benefits to occur in March 2020.

Mr E’s complaint about the transfer delays was not upheld. The PO found that both Mr E and Mrs D were aware of the PSO and, as the trustees responsible for all scheme decision-making, could have ensured that it was implemented before 2019. It was inappropriate for Mr E to have changed the scheme employer’s name without Mrs D’s agreement and without amending the scheme documents. He should have foreseen complications and communicated earlier with Mrs D to ensure a faster transfer process.

The PO’s determination acknowledges the limited role and responsibility of the provider in relation to a SSAS, where the members act as managing trustees who jointly administer the scheme. The provider’s role under the scheme rules was to provide information and technical support. Mr E’s correspondence showed his lack of understanding of the scheme rules, the duties of a managing trustees and the provider’s role.

The PO was clear that he did not expect the provider to take the initiative in implementing the PSO so as to facilitate Mr E’s transfer. Instead, it is the responsibility of the managing trustees to ensure a SSAS is properly run and administered at all times.

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