Pension Liberation Firm Must Hand Over Saver’s Cash

The Pension Ombudsman has ordered a pension liberation scheme to transfer a member’s funds within 14 days of receiving the request.

Omni, a trustee of the Henley Retirement Benefit (Henley) Scheme, had rejected the request for a transfer from a retirement saver on the grounds the paperwork was not properly prepared.

But the ombudsman decided the saver had a statutory right to request a transfer and the reason the money had not been paid out was maladministration by the trustee.

However, the ombudsman also stated misgivings that the alleged pension liberation scheme still had the saver’s funds available to repay.

The ombudsman heard that the saver switched £100,708 into the Henley scheme from two other providers in February 2013.

Requests rejected

After claiming he had heard nothing from the firm for a year, he tried to switch the cash out of Henley to another fund, but two transfer requests were turned down.

The ombudsman pointed out that the decision was not based on whether the scheme was considered a pension liberation operation or not but on the regulations surrounding pension fund transfers, which had been breached by the firm.

The trustees told the ombudsman that they could not repay the money because the organisation was beset with administrative problems and the cash was invested in commercial property that would have to be sold to make funds available for the transfer.

In a separate decision, the ombudsman told a consumer that pension rules could not be applied in retrospect.

The saver had asked Aviva to switch almost £40,000 into a suspected pension liberation fund called Capita Oak.

No retrospective rulings

The firm suggested he take financial advice and carried out his instructions.

Later Capita Oak was accused of aiding pension liberation and the saver claimed Aviva should have protected his cash even though this publicity arose a month after the transfer took place.

The ombudsman ruled Aviva complied with the consumer’s request and acted in his best interests, even though the consumer claimed Aviva should have turned down the transfer request.

The same consumer made another attempted transfer from a separate pension firm a few weeks later. This did not go ahead as the firm refused the transfer without the consumer receiving impartial financial advice, which was not forthcoming.

Between the two requests, HM Revenue & Customs (HMRC) had alerted pension firms that Capita Oak was a suspected pension liberation operation.

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