Transfer delay – The case study of Mrs F

Mrs F was unhappy about delays that she experienced when investigating transferring benefits from her pension scheme (the Scheme). Her advisers had requested a cash equivalent transfer value (the CETV) illustration and additional information about the Scheme. The information was needed to enable them to determine if it was in Mrs F’s interest to transfer. While the bulk of the information was provided in good time, the remainder was not provided until three days before the expiry of the guarantee period for the CETV illustration.

Mrs F decided to transfer. However, due to the delay in the provision of requested information the CETV needed to be recalculated and she was charged a fee for that. On recalculation, the CETV was reduced. Mrs F proceeded with the transfer and estimated her loss to be around £87,000, resulting from a combination of the reduced CETV and the reduced units secured on transfer.

The Scheme trustees (the Trustees) contended that they had met the disclosure requirements and pointed out that Mrs F had proceeded with the transfer knowing that the CETV had reduced.

Our Adviser responded that compliance with the disclosure requirements did not necessarily mean that maladministration had not occurred. These disclosure requirements concern the minimum amount of information that needs to be provided and the maximum time within which it must be provided. While Mrs F had subsequently elected to transfer, that did not mean she had absolved the Scheme of any responsibility to make good the financial loss she had suffered because of the delay.

Having considered the points made by our Adviser, the Trustees now accepted information should have been provided sooner. They offered to pay £10,000 to Mrs F. This was unacceptable to Mrs F, so our Adviser provided guidance on how she could appeal, using IDRP.

An appeal was submitted to the Trustees. After some discussion on when the transfer could have likely been completed, had there been no delay, the Trustees agreed to offer Mrs F £60,000 in settlement of her claim which Mrs F accepted.