How to avoid the Ombudsman

General principles

We know pensions are complicated, and people find them hard to understand. The complaints we see often stem from poor communication, and failings in customer service. 

We believe that clear communication and good customer service can reduce complaints. When communicating with customers make sure information is clear, relevant, and timely to enable people to make informed decisions. All communication channels: websites, letters, telephone calls, email, and webchats should be accessible and reflect members’ needs.

Top Tips to avoid The Pensions Ombudsman

• Take care when speaking to customers, ensure information is clear and unambiguous. They may not fully understand the issues, follow up with an email/letter and keep notes of conversations. In an investigation, we may ask for case notes or recordings of phone calls to evaluate what both parties have said. 
• Make sure customers have access to up-to-date scheme information that is accurate, clear, and concise.
• Communicate scheme changes clearly to customers, and make sure administrators/managers of the scheme are aware of the changes.
• Put yourself in the place of the customer. The ability to be empathetic and listen can avoid an issue becoming a complaint.
• Comply with legal requirements, failure can lead to complaints.
• Avoid delays, comply with internal policy or service level agreements, keep customers informed, explain delays or why a response cannot be given.
• Accept responsibility. If something has gone wrong, do not be afraid to apologise as it can resolve some complaints.  

More information

• The Pensions Regulator gives information on how to communicate with your pension scheme members and staff about the pension scheme including their retirement options, investment choices, contributions, costs and charges.

Case Studies

• Failure to provide information (upheld)
• Misinformation (Adjudicator's Opinion accepted)
• Incorrect information (upheld)
• No evidence misinformation was relied on (partly upheld)

Determinations

• Death benefits (upheld)
• Misquote/misinformation (partly upheld)

What is non-financial injustice?
We can make an award for non-financial injustice to recognise the distress and inconvenience (D&I) a customer has suffered as a direct result of a respondent’s actions or failure to act. There does not have to be any financial loss for an award to be made. 

When will the Ombudsman make an award?
We will consider the submissions of both parties in making an award and provide an explanation for the decision we reach.

The customer must provide evidence of the distress and inconvenience caused, for example, impact on health, relationships and/or quality of life. Each case is assessed on its own facts and merits, we will consider: 

• whether it was obvious there was maladministration and whether the complaint could have been easily avoided or resolved at an early stage
• how well the respondent handled the customer’s complaint
• any excessive or extensive delays and whether these were readily avoidable 
• the number of times distress and inconvenience was caused - once, on several occasions or over an extended period 
• the level of distress and inconvenience suffered.

How much will be awarded?
An award for non-financial injustice will usually fall into one of the following five categories of awards; nominal, significant, serious, severe and exceptional which range from no award if the distress and inconvenience is nominal to more than £2,000 if it is exceptional.

Further guidance can be found in our ‘Redress for non-financial injustice’ factsheet.

Our Adjudication teams will consider an award in line with this guidance.

If the complaint is being dealt with by the Resolution Team, the parties can agree a resolution which includes an amount for distress and inconvenience which is outside this guidance. If you are considering making an offer, talk to the Resolution Specialist, who will discuss whether an offer is reasonable and likely to resolve the complaint.

TPO Guidance

• Redress for non-financial injustice

Case Studies

• Contributions not paid to scheme (upheld)
• Death benefits (Adjudicator's Opinion accepted)
• Exercising discretion (Adjudicator's Opinion accepted)
• Failure to provide information (upheld)

Determinations

• Recovery of overpayments (partly upheld)
• Misquote/misinformation (partly upheld)
• Auto enrolment (upheld)
• Failure to provide information/act on instruction (upheld)

What is an ill health retirement pension?
A pension scheme may provide for a member’s pension to start being paid before their normal retirement age if they are unable to work due to ill health. The amount of pension payable depends on the type of pension scheme and the status of the member, for example whether they are still working for the scheme employer.

Who decides if a member is eligible for an ill health pension?
The rules of the scheme will set out the party who must decide whether a member is eligible for an ill health pension. Usually, this will be the employer or trustee of the scheme. The scheme rules may also require the decision maker to seek a medical expert opinion. 

For example, some scheme rules provide that the decision maker has discretion whether to pay an ill health pension, other scheme rules provide that an ill health payment must be made if certain criteria are satisfied.

What will TPO look at when investigating a complaint? 
We are not medical experts and are not qualified to question medical advice received by the decision maker. If the decision maker has received medical advice that a member does not meet the eligibility criteria for an ill health pension set out in the scheme rules, we cannot direct the decision-maker not to take that medical advice into account.

We can investigate whether the decision maker followed the correct process in reaching its decision, including looking at which factors they took into account, and whether the eligibility criteria in the scheme rules were interpreted correctly. If the correct process has not been followed, we can direct the decision maker to reconsider its decision. We can also make an award for any distress and inconvenience the member may have suffered.

TPO Guidance

You may find the following guidance useful to pass to your members.

• Ill health

Case studies

• Ill health (not upheld)
• Ill health (resolved by ERS)
• Ill health (resolved by ERS)
• Ill health (resolved by ERS)
• Ill health (upheld)

Determinations

• Ill health (upheld)
• Ill health (partly upheld)
• Ill health (not upheld)

What are an employer’s obligations to pay contributions into a workplace pension scheme?
Employers are required to offer most workers a workplace pension scheme, where both the employer and the employee may make contributions. The employee’s contributions are normally deducted from their wages and paid into the pension scheme by the employer. The employer must ensure that both the employer and employee contributions are paid on time and in the correct amounts.

When will the Ombudsman get involved?
If an employee is concerned that pension contributions are not being paid into their pension scheme correctly, they should look to resolve these concerns with their employer. 

Where a complaint cannot be resolved, we may investigate a claim against an employer, regardless of the value of the unpaid contributions. Cases are assessed and then handled informally by our Resolution Team or on a more formal basis by our Adjudication Team.

An employee can also report an employer to The Pensions Regulator, who is responsible for enforcing employer compliance. The Pensions Regulator does not investigate individual complaints.

What can the Ombudsman award?
Where a complaint cannot be resolved informally and the employer is found to be at fault, we have the power to direct employers to pay any outstanding contributions into an employee’s workplace pension scheme and any remedy may include investment loss or interest depending on the circumstance.

We can also make an award for any distress and inconvenience the employee may have suffered.

What if an employer becomes insolvent?
If an employer has become insolvent and did not pay the employer and employee contributions for a time before insolvency, a remedy may be sought from the National Insurance Fund (the NIF).

The NIF can pay out the missing employer and employee contributions that were due to be paid in the 12 months leading up to the date of insolvency. The Pensions Ombudsman is not involved in an application to the NIF.

Case studies

• Unpaid contributions (resolved by ERS)
• Non-payment of contributions (upheld)
• Failure to pay contributions (upheld)
• Contributions not paid to scheme (upheld)

Determinations

• Contributions: failure to pay into scheme (upheld)
• Contributions: failure to pay into scheme (partly upheld)
• Contributions: failure to pay into scheme (not upheld)

What is a death benefit and when will it be paid?
Death benefits under a pension scheme can be payable on the death of an active, deferred or pensioner member. The benefit payable can be a pension and/or a lump sum. 

If a pension is payable, it will usually be paid to a dependant and the scheme rules/regulations will usually define who a dependant will be. For example, it could be the member’s spouse or civil partner at the date of the member’s death.

If a lump sum is payable, the scheme rules/regulations will usually set out the class of beneficiaries to whom a lump sum can be paid. This will usually include spouses, partners, dependants, children, the member’s parents or siblings, and any person nominated by the member, with the decision normally being made by the trustee/manager of the scheme (administering authority or manager in a public sector scheme). 

When would the Pensions Ombudsman become involved?
The Pensions Ombudsman has jurisdiction to deal with complaints relating to death benefits payable from pension schemes. A complaint can be against the trustee, manager, administrator and/or employer of the scheme. Such complaints may include failure to properly pay a death benefit, delays in payment of a death benefit, failure to properly exercise discretion to pay a death benefit and issues relating to inadequate explanation or provision of information.

What are the Pensions Ombudsman’s powers?
Normally, if the Pensions Ombudsman finds that the decision maker has not considered the matter properly, it will be remitted back to the decision maker for reconsideration. The Ombudsman will not usually interfere with a decision unless it is considered that the decision process was flawed in some way or the decision is considered to be perverse and unreasonable. 

The Pensions Ombudsman can also make an award for any distress and inconvenience the complainant may have suffered.

TPO Guidance

You may find the following guidance useful to pass to your members.

• Death benefits

Case studies

• Death benefits (not upheld)
• Death benefits (upheld)
• Death benefits (upheld)
• Death benefits (Adjudicator's Opinion accepted)
• Failure to exercise discretion properly (upheld)

Determinations

• Death benefits (upheld)
• Death benefits (partly upheld)
• Death benefits (not upheld)

When we start investigating the complaint we will usually ask your business for a formal, written response. 

It is important that you are open, transparent and provide the information requested. By law you must respond to a complaint made about your business and provide information when we request it. You should provide a written response within 21 days after we ask you to respond to the complaint. In some circumstances we can extend this timeframe.

Remember to:

• State your case
• Provide evidence to support your case
• Keep to deadlines.

In your response you should tell us:

• the facts, as you see them, relating to the complaint
• if you oppose the allegations made and why
• about anyone else who might have a direct interest in the complaint
• if you are appointing a representative. 

You’ll also need to send us a copy of any documents we ask for.
If you don’t respond to a complaint made about you we may make a decision without your evidence or we can use our statutory powers to require you to respond.

For more information including your rights and responsibilities during an investigation - https://www.pensions-ombudsman.org.uk/responding-complaint

Usually, we will share all the information we receive with all parties and give them an opportunity to comment. This means that anything you send to us is shared with the person making the complaint. Information received from them is likely to be shared with you. Therefore, it is important that any personal information relating to anyone unconnected to the complaint is either removed or redacted from anything you send to us. 

We will not withhold information from other people involved in the complaint or communicate on a ‘strictly confidential’ or ‘without prejudice’ basis. 

For Pension Protection Fund and Financial Assistance Scheme complaints the information provided by other parties will also be made available to any significantly adversely affected people or interested persons.

If a complaint is complex, or there are a number of people involved, we may need to make several requests for information to establish the facts.

If the complaint is being looked at by our Early Resolution Service, the terms of any resolution must be agreed by all parties.

The Early Resolution Team:

• will look at the merits of a complaint 
• will explore the issues and possible options
• may come to the view that the respondent has done nothing wrong and will explain why to the customer
• if they feel more should have been done by the respondent, will try to achieve an informal resolution with both parties.

Whatever our caseworker’s opinion, if a resolution cannot be reached, or if any of the parties tell us that they no longer want to use the ERS, the complaint will move to our Adjudication Team to conduct a formal investigation. Any opinion or decision made by an Adjudicator, or the Ombudsman will be made completely independently of the ERS.

We will need to ensure any jurisdictional requirements are met before we can begin a formal investigation. If not already completed, the customer may have to complete the respondent's formal complaints process first.

If the complaint is being looked at by our Adjudication Service, an Adjudicator will write to all parties and give their view on the complaint.

If they think nothing has gone wrong, they will explain why. Or, if an Adjudicator thinks something has gone wrong, they will explain their thinking and say what should be done to put things right.

Everyone involved in the complaint will have a chance to comment on the Adjudicator’s view.

If all parties accept the Adjudicator's view and proposal to put things right we will close the case.

If any one of the parties to the complaint does not agree with the Adjudicator's view, they can ask for the complaint to be referred to the Ombudsman. The Ombudsman will issue a final Determination which is legally binding on all parties, subject to an appeal on a point of law to the High Court (or Court of Sessions in Scotland).

The Ombudsman’s Determinations are final, binding and enforceable in court (unless there is a successful appeal on a point of law). 

If the Ombudsman decides a complaint should be upheld or partly upheld they will usually tell the person at fault to put things right by issuing directions.

This might include:

• Making good a financial loss or taking other steps to correct the problem. 
• Paying compensation for any non-financial injustice, such as distress or inconvenience caused. 

There is no financial limit to the value of the award the Ombudsman can make.  If a complaint is upheld, it will be to put the matter right, as if a mistake had not been made, rather than what is fair and reasonable.

It is important that you comply with the directions within the timescales given as directions are enforceable through the County Court (Sheriff Officer in Scotland). The only exception is where the Determination is successfully appealed or pending an appeal hearing.

There is no financial limit to the value of the award the Ombudsman can make.

All Determinations are published on our website – please see previous decisions. Determinations are generally anonymised and have the name of the person making the complaint as well as any other identifying personal data removed.

More information can be found in our Determination factsheet.

Sometimes, if a complaint is being looked at by the Ombudsman they will issue their initial view on a complaint, known as a preliminary decision. This will be sent to everyone involved in the complaint and they will be invited to comment, and given the deadlines for doing so, before the Ombudsman makes a final decision.

If you disagree with the Determination on a point of law, you can ask the High Court for leave to appeal. Because the Determination is final and binding the Ombudsman cannot change it, except for minor errors (such as typing mistakes). 

There is no point in writing to the Ombudsman further at this stage to ask for the decision to be changed. If you want it changed you must appeal to the appropriate court. You can only appeal on a point of law. If you intend to appeal, you may want to consult a solicitor.

More information about the Ombudsman’s Determinations, and how to appeal them, is in our Determination factsheet.

The Pensions Ombudsman is not a consumer champion or a watchdog. 

We act impartially. That means we consider all the evidence submitted by both sides before we make a decision.

In 2020/21, 59% of Determinations by the Ombudsman were not upheld.

Before making a decision, we look at things like whether the pension provider has:

• taken too long to do something without good reason
• failed to do something they should have
• not followed their own rules or the law
• broken a promise
• given incorrect or misleading information
• not made a decision in the right way.

Evidence gathered during the investigation is shared with all parties and who are given the opportunity to make comments. 

Engaging with the wider pensions industry is essential. One of our key priorities is to work with stakeholders to improve dispute resolution across the industry and ensure that complaints are, as far as possible, resolved without the need to come to TPO. 

We continue to expand our stakeholder engagement activities; using our stakeholders’ experiences to improve and evolve our service.

Stakeholder engagement activities include:

• working collaboratively with strategic partners
• attending industry events 
• providing speakers for events
• hosting events
• annual Stakeholder satisfaction survey
• our stakeholder e-newsletter.

If you are interested in finding out more or would like to be added to our mailing list, please email stakeholders@pensions-ombudsman.org.uk.

In 2020, we conducted our first stakeholder satisfaction survey to find out what TPO could do to help stakeholders resolve complaints without the need for TPO involvement. Addressing the feedback is a key priority over the coming year and will help us to drive up standards in dispute resolution across the pensions industry.