Old British Steel Pension Scheme (PO-16970)
Mr A’s complaint is as follows:-
Communications in respect of the OBSPS were misleading and scaremongering.
The cash equivalent transfer value (CETV) paid to his chosen receiving scheme was not an accurate representation of the benefits he accrued within the OBSPS. He says he felt pressured by the information the Trustee provided regarding the OBSPS entering the Pension Protection Fund (PPF) and believed transferring out would be his best option. He later discovered that members who had remained in the OBSPS saw a huge increase in their CETVs following a change to the calculation basis; the Trustee did not make him aware of this change. He would like his CETV calculated on the new basis and the difference transferred to the receiving scheme.
The explanation the Trustee has provided for the differences in CETVs before and after the calculation basis change does not account for the significant increases seen in CETVs. Therefore, the only logical explanation is that the CETVs prior to the change of calculation basis were incorrect. The CETV he was provided with must have been wrong because the Trustee should have made changes to its investment strategy and amended the CETV calculation basis at an earlier date.
Summary of the Ombudsman’s Determination and reasons
The complaint is not upheld against the Trustee because:-
The information the Trustee provided to members in relation to the OBSPS’ future was not misleading, nor did it amount to ‘scaremongering’. Furthermore, I do not consider that the Trustee intended it to be so. Instead, the information provided was necessary to keep members abreast of developments so that they could consider how the scenarios might affect them. It was to provide factual information. I have found no maladministration in respect of the announcements and information provided.
The Trustee has obtained and considered the appropriate advice from suitable parties in order to reach its decisions in respect of: the OBSPS; its future; the Statement of Investment Principles (SIP); and the CETV calculation basis. I find that the relevant factors had been considered and the decisions reached were not perverse.
The CETV calculation basis applicable at the point Mr A was provided with his guaranteed CETV is a matter for the Trustee and any calculation correctly applying that CETV calculation basis was not maladministration. I have not found any error in the calculation of Mr A’s CETV, it was calculated using the agreed basis at the point of the calculation.
The Rules that govern the OBSPS do not provide that a CETV shall be recalculated if the CETV calculation basis is changed at a future date. Nor is it reasonable to expect the Trustee to recalculate CETVs already paid and increase such payments (or conversely, as the case may be, decrease such payments and seek repayment of any funds already paid, in excess of those calculated on the lower basis). In cases such as Mr A’s, in which he exercised his right to transfer by requesting a transfer on the former CETV basis, I cannot find maladministration in the Trustee’s completion of the transfer out, as the Trustee is bound to action the member’s statutory right to transfer, which it did.
The notification requirements in respect of the OBSPS, with regard to this complaint, were either met or not applicable. Moreover, the fact that Mr A only became aware of future changes after transferring out of the OBSPS does not amount to maladministration.
Mr A exercised his right to transfer and the Trustee became bound to carry out his request and complete the transfer within the required timeframe.