Lloyds Bank Pension Scheme No1 · CAS-36743-M8B0

CAS-36743-M8B0

Ombudsman’s Determination Applicant Ms S

Scheme Lloyds Bank Pension Scheme No.1 (the Scheme)

Respondents Lloyds Banking Group Pensions Trustees Limited (the Trustee)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the main points. I acknowledge there were other exchanges of information between all the parties.

Ms S held benefits in the Scheme, an occupational pension scheme (OPS), and says she was approached to transfer them to the FP1 Plan, via an unsolicited call from an unregulated adviser.

In August 2012, the Trustee received a letter of authority (LOA) signed by Ms S and a request for information about the Scheme. This LOA asked for the information to be sent directly to Fast Pensions, the trustee of the FP1 Plan.

On 12 September 2012, the Trustee wrote to Fast Pensions with a transfer value and requirements that needed to be met for the transfer to proceed.

On 21 September 2012, Ms S wrote to the Trustee confirming that she wanted to transfer to the FP1 Plan. Ms S named AC Management & Administration Limited (AC Management) as the administrator of the FP1 Plan and provided bank account details for payment. On 29 September 2012, Ms S returned the relevant documentation to enable her transfer to proceed.

1 CAS-36743-M8B0 On 3 October 2012, AC Management wrote to the Trustee and confirmed that the receiving scheme, the FP1 Plan, was a HMRC registered scheme. It provided a Pension Scheme Tax Reference (PSTR) and confirmed that Ms S wanted to transfer into the FP1 Plan. The completed release forms were included with the letter and were signed by Ms S and one of AC Management’s administration team.

On 8 October 2012, the Trustee wrote to AC Management as the Transfer Declaration Form was incomplete, the section asking for the receiving scheme name had not been filled out. The Trustee asked for the completed form to be returned before the transfer could be progressed. On 10 October 2012, AC Management wrote to the Trustee with the completed Transfer Declaration Form.

On 12 October 2012, the Trustee wrote to AC Management and confirmed that the transfer had been completed and payment would be made in the next three days. In total, around £180,000 was transferred from the Scheme to the FP1 Plan. A letter confirming this was also sent directly to Ms S.

On 15 July 2018, The Pensions Regulator (TPR) appointed Dalriada as independent trustees to the FP1 Plan. Dalriada wrote to members of the FP1 Plan informing them of the decision and continued to provide further updates, the last of which was in May 2023.

Ms S’ representatives have subsequently argued that the Trustee did not exercise its duty of care to protect its member’s interests, as it was later found that the FP1 Plan was a pension liberation scheme. Also, that Ms S was exposed to loss of her pension funds due to the Trustee not following guidance put in place by TPR.

Ms S’ representatives said that the Trustee should have followed TPR guidance, spotted the warning signs that applied and not allowed the transfer to proceed. The following warning signs were highlighted:

• the receiving scheme being newly registered with HMRC;

• the administrators of the scheme being a newly registered company;

• an unsolicited approach being made to a member after applying for a loan;

• an unregulated adviser pressuring the member into completing the transfer; and

• the member being promised an unrealistic rate of return and a signing up bonus.

Ms S asked to be put into the position she would have been in had the transfer not been processed, leaving her funds invested in the Scheme instead of in the FP1 Plan.

2 CAS-36743-M8B0 On 23 December 2019, the Trustee responded to the complaint and said that it carried out the necessary checks, in line with its due diligence process in place at the time. The Trustee made the following points:-

• The FP1 Plan was a valid scheme, registered with HMRC, with a valid PSTR.

• It was not made aware of the warning signs later pointed out in the complaint and there was no evidence of Ms S being pressured into transferring quickly.

• It initially refused Ms S’ transfer request as the forms were incomplete, this indicated a thorough checking process.

• Ms S signed a declaration confirming she was responsible for ensuring the transfer was suitable for her circumstances.

• It kept its own list of suspicious schemes and checked this as part of its transfer process. The FP1 Plan was not on the list, so it did not carry out any additional due diligence.

• Ms S was aware of the information provided by Fast Pensions and AC Management and was able to conduct her own due diligence or seek independent financial advice.

• The industry approach to pension liberation was still developing in 2012. Steps were taken to identify potential scams, but it was incumbent on members to understand the nature of investments and risks involved and seek appropriate advice.

The Trustee said that it had no concerns about the FP1 Plan at that time, having carried out a sufficient level of due diligence, so completed the transfer in line with Ms S’ request.

Adjudicator’s Opinion

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The FP1 Plan was registered with HMRC with a valid PSTR. There was no indication to the Trustee that Ms S was approached unsolicited, via a cold call or that she was offered an incentive to transfer. Ms S made the initial request for information herself and included a valid LOA. There was also nothing at the time to indicate that Ms S was promised an unrealistic rate of return and there was no pressure put on the Trustee to speed up the transfer process. As such, the warning signs mentioned by Ms S’ representatives were not present.

Ms S did not accept the Adjudicator’s Opinion, none of the parties provided any further comments or submissions and the complaint was passed to me to consider. I agree with the Adjudicator’s Opinion.

Ombudsman’s decision

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I do not uphold Ms S’ complaint.

Dominic Harris

Pensions Ombudsman 7 May 2024

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