New hope for pension scam victims after ombudsman ruling

A landmark ruling from The Pensions Ombudsman (TPO) that found not enough warnings and checks were made regarding a pension transfer could help past victims of pension scams claim redress.

The case relates to a police officer who transferred his police pension into an alternative scheme, which he now to believes “may have been lost or misappropriated”.

The scheme that the money was moved into was an occupational pension called London Quantum. It had only been established recently and TPO said that it should have been obvious to Northumbria Police that its officer would not have had a working relationship with it.

The ombudsman ruled the Northumbria Police Authority had failed the policeman in two ways: by not sending him the official anti-scam literature prepared by the Pensions Regulator and by not carrying out proper checks on the pension scheme into which the money was being transferred.

The ombudsman ruled the scheme was guilty of maladministration and ordered it to reinstate the police officer’s pension rights as far as possible.

While TPO rulings cannot set precedent, it has shifted the focus back on schemes and employers over what responsibilities they should bear when savers are scammed.

“This is a very important ruling,” said Royal London director of policy Steve Webb. “While individuals obviously have a responsibility to take good care of their pensions and to take proper advice, this shows pension schemes also have important duties to protect members – not only should they flag the risk of scams, but they should also be undertaking thorough checks about where the money is going to be transferred to.”

“It might be the case that some past victims of scams who have complained to a pension scheme and been turned away could still receive redress if the ombudsman thinks their scheme trustees did not do a proper job in protecting them,” the former pensions minister added.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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