Transfer from an occupational scheme to a personal pension arrangement – The case study of Mr S

Mr S was a member of his employer’s occupational pension scheme, the Aspen UK Pension Plan (the Scheme). When his employment ended he had accrued less than two years’ service, and in accordance with the Scheme rules, he was required to either transfer out his accrued benefits or have the funds returned to the employer. Mr S decided to transfer his benefits out of the Scheme. He informed the scheme administrator, Fidelity, that he would do so and completed the relevant paperwork within the three-month time scale.

On completing the transfer paperwork, Mr S was informed that he had a further three months to complete the transfer (this was on 26 October 2015). The receiving scheme administrator, Virgin Money Unit Trust Managers Ltd (Virgin), wrote to Fidelity enclosing the transfer discharge form on 3 December 2015 and asked for the money to be sent. Fidelity claimed it never received the letter of 3 December 2015 and as a result, the three-month deadline passed and the funds were returned to the employer.

The case was considered by the Ombudsman who decided that it was more likely than not that the letter of 3 December 2015 was sent and received. It was commented that, as the letter was addressed correctly, it was therefore unlikely that the letter had not been sent and that it had not reached its intended recipient. It was more likely that Fidelity had failed to act on the instructions due to human error. Having considered how long it might have taken to receive the letter and process the request, the Ombudsman directed that Fidelity should pay the transfer value of his benefits to Virgin at the value on 8 December 2015 and make good any loss of investment return in the receiving scheme.

Related determinations

• Aspen UK Pension Plan (PO-12164)