Putting things right
If we find that something has gone wrong, we will decide what needs to be done to put things right.
This might include telling someone to make good financial loss, directing them to take a certain action, or to pay compensation for any non-financial injustice, such as distress or inconvenience caused.
During our investigation we will also consider whether the person making the complaint took (or could have taken) action to avoid or reduce their loss and take this into account when making our decision.
We can usually only consider whether there has been any harm to the individual who has come to us with the problem. There are some exceptions, for example if money has been paid out of a pension scheme in breach of trust at a loss to the whole scheme.
If there has been harm we can tell the people at fault to pay compensation or take other steps to put matters right.
We cannot make trustees, managers, employers or scheme administrators change their general working practices. Nor can we can fine or punish them.
There is no financial limit to the value of the award we can make in any individual case.
We will decide if someone has lost money as a result of anything that has gone wrong. If they have, we will try to put them back into the position they would have been in if everything had been done correctly.
We may tell the people at fault to pay a sum of money. It might be a payment to the person’s pension plan – or it might be a direct payment to the individual, depending on the circumstances.
Or we may tell them to increase a pension for the future, or make other adjustments in amounts of money.
Redress for non-financial injustice
We can also consider whether someone has been caused significant inconvenience, disappointment or distress. If we think someone has been affected, we can tell the party at fault to compensate them.
But these awards are not automatic. They will usually start from £500 and go up to about £1,000. Sometimes higher awards will be necessary.
Non-financial injustice e.g. inconvenience, can include things such as the time and effort spent trying to sort a problem out; or distress can include things like concern, anxiety, anger, disappointment or embarrassment.
We look at each case individually taking into account what happened. We will consider whether or not a reasonable person in the same situation would have reacted in the same way. But we will also take into account the person’s circumstances.
Please see our factsheet for more details.
Decisions and discretions
If we think that someone responsible for a decision or the exercise of discretion has got the law wrong, not followed the scheme’s rules or regulations, or not taken the right things into account, we will usually tell them to go through the process again, but properly.
There are lots of other kinds of instruction we can give to the people at fault. For example, if someone is being denied the opportunity to do something, if the case justifies it we can say that they should be given that opportunity.
In other cases we might tell the people responsible not to do something – for example, if there’s been an overpayment of pension we might tell them not to take action to get it back.
We do not as a matter of course make awards for costs charged by professional advisers to the person complaining. That is it should be possible to bring a complaint to us without professional help.
However, in some circumstances we may direct the people at fault to pay the other person’s costs.
This depends on a number of factors such as the complexity of the case and whether or not:
- it was reasonable for the costs to be incurred
- the amount of costs claimed is reasonable
- costs were incurred as a direct result of whatever went wrong.
If we direct the people at fault to pay interest we will usually refer to “the base rate for the time being quoted by the reference banks”. At the time we make the direction we will explain how to find out what the rate is.
Where we find that benefits have been paid late we are required by law to use this rate, but in some situations another rate of interest may be used.