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Old British Steel Pension Scheme (PO-18762)

Complainant: Mr D
Complaint Topic: Transfers: general
Ref: PO-18762
Outcome: Not upheld
Respondent: 1. B.S. Pension Fund Trustee Limited
2. Open Trustees Limited
Type: Pension complaint or dispute

Ombudsman’s Determination

Complaint Summary

Mr D’s complaint is as follows:-

Communications in respect of the OBSPS were misleading and amounted to scaremongering.

The cash equivalent transfer value (CETV) paid to his chosen receiving scheme is not an accurate representation of his benefits within the OBSPS.

When the Trustee changed the CETV calculation basis, Mr D was offered the option of: proceeding with the CETV he had already been given in his statement of entitlement; or waiting for an updated CETV calculated on the new basis. Mr D opted to proceed with his existing CETV. He later discovered that members who had remained in the OBSPS saw a significant increase in their CETVs. He feels that the Trustee was aware that his transfer value would increase significantly and that it should have provided clear information to enable him to make a fully informed decision. It was unreasonable that the Trustee did not guarantee that the CETV would increase when recalculated using the new basis.

To put matters right, Mr D would like his CETV recalculated using the new basis and for the difference between that and the value already transferred to be paid to his chosen receiving scheme.

Summary of the Ombudsman’s Determination and reasons

The complaint is not upheld against the Trustee because:-

The information that 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 D 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 D’s CETV; it was calculated using the agreed basis at the time 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 D’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 and within the required time frame, which it did.

The notification requirements in respect of the OBSPS, with regard to this complaint, were either met or not applicable. There is no requirement for the Trustee to offer members the option to obtain a CETV on the new calculation basis if they have already been provided with a CETV on the former calculation basis.

Mr D was given the option to await a CETV calculated on the new basis. It was reasonable for the Trustee to offer this option, especially as there was no legal requirement for it to do so. I find that sufficient information was provided by the Trustee to enable a member to make an informed decision whether to proceed with the transfer on the former calculation basis or to obtain a CETV calculation on the new basis. Guaranteeing that CETVs would increase would have surpassed the Trustees’ duty and, in doing so, the Trustee could have provided a CETV in excess of that to which the member was entitled, potentially to the detriment of other members as the excess would have been paid from the OBSPS’ funds. I find that the information the Trustee provided to make this decision was reasonable in the circumstances and that it is only with the benefit of hindsight that criticism can be made.

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