Skip to main content
Complaint Topic: Transfers
Outcome: Not upheld
Type: Pension complaint or dispute

Mr N has a self-invested personal pension (SIPP) with Zurich which is administered by Curtis Banks (Zurich/CB). In late January 2017, Mr N asked Zurich/CB to transfer the SIPP fund to the RCJ Management Ltd Pension Scheme (the RCJ Scheme), a small self-administered pension scheme (SSAS). Zurich/CB said that, because the receiving scheme was a SSAS, it carried out additional due diligence checks including: seeking confirmation of the current registration status of the RCJ Scheme from HM Revenue & Customs (HMRC); and requesting additional information from the trustee of the RCJ Scheme.

In March 2017 Zurich/CB told Mr N that it would not be progressing the transfer to the RCJ Scheme because HMRC had been unable to confirm the registration status of the RCJ Scheme. Further, it had identified 16 areas of concern, including:

  • The principal employer of the RCJ Scheme had 58 current directors, in varying occupations and locations.
  • The principal employer had no website or listing on directories.
  • Mr N was unable to provide payslips or an employment contract to confirm his relationship with the principal employer.
  • The Trust Deed and Rules for the RCJ Scheme had been put in place after RCJ Limited was dissolved.
  • The scheme administrator had not responded to a request for supporting information to enable Zurich/CB to undertake further due diligence.
  • There were negative forum comments on Money Saving Expert.
  • The RCJ Scheme had links with the Incartus Scheme – which failed its due diligence and had independent trustees appointed by TPR.
  • Mr N was aggressively chasing the transfer.

Our Adjudicator was of the opinion that, in view of Zurich/CB’s concerns, it was reasonable for Zurich/CB to decline the transfer. This meant it would not be possible to uphold any claim for compensation in respect of a perceived investment loss or an award for distress and inconvenience.

Mr N did not accept the Adjudicator’s Opinion. He said that he had a statutory legal right to transfer his pension.

The Ombudsman found that Mr N had acquired a right to take a cash equivalent transfer value in accordance with Chapter IV of Part 4ZA of the Pension Schemes Act 1993.

The Ombudsman explored the provisions of the Pension Schemes Act 1993 (the Act) as they relate to this matter. The right under section 94 of the Act is a right to take a cash equivalent transfer in accordance with the requirements of Chapter IV of Part 4ZA, which includes section 95 of the Act. Section 95 of the Act sets out how a member is entitled to take his cash equivalent transfer. In Mr N’s case, the relevant provision is section 95(3)(a)(ii): acquiring transfer credits allowed under the rules of an occupational pension scheme which satisfies prescribed requirements. Regulation 2(1)(A) of the Personal Pension Schemes (Transfer Values) Regulations 1987 (the Regulations) provides that those prescribed requirements include the requirement that the receiving scheme (if not a qualifying overseas pension scheme or a retirement annuity contract) is registered with HMRC.

The Ombudsman concluded that there is no abstract right for a member to take a cash equivalent transfer under section 94 of the Act, as it is subject to section 95 of the Act. Accordingly, Zurich/CB was entitled to treat the RCJ Scheme, which could not establish its registered status, as having failed to comply with the prescribed requirements of section 95 of the Act, namely regulation 2(1)(a) of the Regulations.

It followed that, as the RCJ Scheme could not establish its registered status, Mr N had no statutory right to a cash equivalent transfer to the RCJ Scheme and Zurich/CB was justified in refusing his request. The Ombudsman said the decision in Hamar v Pensions Ombudsman [1996] PLR 1 supported his view.  

Related determinations

Related case studies

  • Early retirement

    In the lead up to his retirement Mr M obtained several different benefit illustrations from his pension scheme. Unfortunately, he misinterpreted them, not realising that because of contracting-out requirements, by electing to draw his pension benefits at 64 he would lose his option to take the tax-free lump sum on retirement.

  • Interpretation of scheme rules

    Mr A was a retained firefighter and is now a deferred member of the New Firefighters’ Pension Scheme (England). He complained that the Warwickshire Fire and Rescue Authority was not treating his disturbance, work activity and training attendance payments as pensionable.