Qualifying Recognised overseas pension scheme transfer – The case study of Mrs Y

Mrs Y is a member of the Principal Civil Service Pension Scheme (the Scheme). In late 2014 she decided to transfer her benefits to an overseas scheme in Australia. There had been two recent changes made to legislation that affected Mrs Y’s right to transfer. From 6 April 2015, members of unfunded occupational schemes were only allowed to transfer to other defined benefit arrangements. In addition, a pension age test was also introduced requiring overseas schemes to confirm that benefits would not be paid to members before age 55 (except in the case of ill health). As a result of the introduction of the pension age test, many Australian schemes disappeared from the new recognised overseas pension scheme (ROPS) list, as Australian legislation allows members to access benefits, outside of ill health, before age 55.

MyCSP (administrator for the Scheme) was responsible for a number of delays in the lead up to the legislative changes which meant that Mrs Y was unable to return the transfer paperwork until 30 March 2015. However, by the time MyCSP began processing the transfer, Mrs Y’s chosen receiving scheme was no longer listed on the new ROPS list. Following the IDRP, Mrs Y’s complaint was upheld, but the transfer could not proceed as the receiving scheme was a non-ROPS scheme (meaning any transfer would be considered by HM Revenue & Customs as an unauthorised payment).

The Deputy Ombudsman upheld the complaint. She agreed that the delays by MyCSP meant that Mrs Y had lost the opportunity to transfer. It was not possible for her to put aside the relevant legislation and direct the transfer to proceed, as this would still result in the transfer being an unauthorised payment (the scheme regulations do not allow for an unauthorised payment to be made authorised). Taking into account Mrs Y’s expectation of having access to a higher lump sum following the transfer, her time until her retirement age and having to work longer to achieve her retirement plans, the Deputy Ombudsman directed MyCSP to pay Mrs Y £2,000 in recognition of the significant distress and inconvenience caused.  

Related determinations

• Principal Civil Service Pension Scheme (PO-16581)