Debenhams Retirement Scheme · CAS-44987-C3D3

CAS-44987-C3D3

Ombudsman’s Determination Applicant Mrs S

Scheme Debenhams Retirement Scheme (the Scheme)

Respondents Debenhams Pension Trust Ltd (the Trustee), and Mercer

Outcome

Complaint summary

• She made a valid application to transfer the CETV of her benefits within three months of the guarantee date. Mercer intentionally delayed the transfer, in the knowledge that the Scheme would be entering a Pension Protection Fund (PPF) assessment period (the Assessment Period). She has suffered a financial loss as a direct result.

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

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“The benefits payable to or in respect of any member under the scheme rules during the assessment period must be reduced to the extent necessary to ensure that they do not exceed the compensation which would be payable to or in respect of the member in accordance with this Chapter…”

• She requested a transfer as she had rental properties which would provide her with an income in the future. She was informed that the transfer would take 6/8 weeks. Eight months had elapsed and she still had not received her transfer payment.

• She was told that the transfer had been completed on 16 April 2019. She was then told that Mercer was waiting for three signatories and that the transfer would be completed by the end of the following week.

• On 8 May 2019, she was told that transfers from the Scheme had been suspended. She contacted Mercer regularly after this.

• On 31 July 2019, she asked for her complaint to be referred to the Trustee.

2 CAS-44987-C3D3 • On 21 August 2019, she was informed that Mercer was waiting for one final item. The following day, she was “extremely disappointed” to be told that the transfer would not be going ahead afterall.

• She decided to transfer her pension to make her and her husband’s lives “easier.” This matter has caused her distress and has affected her physical and mental health.

• After speaking with Mercer on 6 September 2019, she became unwell. Her GP sent her to the hospital, as he suspected that she had suffered a heart attack. The doctors asked her whether she was experiencing stress. When she explained what had happened regarding her transfer, they could not rule out that this was a contributory factor in her symptoms.

• A reduced CETV would be payable, in line with the PPF compensation level rules.

• Under pension legislation, a transfer payment had to be issued within six months of the date of calculation. Consequently, the Trustee had to obtain confirmation from the PPF that the transfer could be made.

• The PPF had confirmed that the six-month time limit did not apply in Mrs S’ case. So, the Trustee could pay the CETV, at the reduced level, in line with the PPF compensation level rules.

• She contacted Mercer on several separate occasions. Eventually, she complained to the Trustee.

• Mercer failed to relay clear and accurate information in a timely manner.

• She reluctantly accepted the offer of the Reduced CETV. She has suffered sleepless nights, distress, and anxiety.

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• The Trustee was prevented from paying Mrs S the Higher CETV, as the Scheme had entered an Assessment Period. The Trustee has no power to pay additional amounts in respect of Mrs S’ transfer.

• At the time the Scheme entered the Assessment Period, the statutory six-month time limit for making a transfer payment under s99(2) of the Pension Schemes Act 1993 had not been exceeded. The time taken to process the transfer is not out of line with other pension schemes.

• The Trustee has acknowledged that Mercer made administrative errors in Mrs S’ case. The Offer is appropriate and in line with the Pensions Ombudsman’s guidance on awards for non-financial injustice.

Adjudicator’s Opinion

• Under Section 138 of the PA 2004, benefits payable under the scheme rules, during the Assessment Period, must be reduced to ensure that they do not exceed the levels of PPF compensation. The Trustee would have acted contrary to the law if it had paid Mrs S the Higher CETV.

• The events that led to the Scheme entering the PPF were outside Mercer’s control. However, the provision of incorrect information on the part of Mercer, concerning the status of the transfer, and its mishandling of the transfer application, have compounded matters.

• The Adjudicator considered that the Offer was in line with what I would direct for non-financial injustice in similar cases. The Adjudicator noted that the Offer was still available to Mrs S to accept.

Mrs S did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mrs S provided her further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mrs S.

Mrs S has asked that I review her case and issue a final decision. She considers that Mercer has unfairly treated her, as there were several instances where it failed to provide information or confirm the correct position. She initially requested to transfer her pension when she reached age 55, she is now approaching age 59; this matter has had a huge impact on her life.

4 CAS-44987-C3D3 Ombudsman’s decision During an Assessment Period, trustees must not take steps to pay benefits or discharge the scheme's liabilities. There are some exceptions, for example, where a member made a valid application to transfer the CETV of their benefits before the Assessment Period commenced.

The Trustee was able to proceed with the transfer in this case because Mrs S made a valid application to transfer before the start of the Assessment Period. However, the CETV was payable at a reduced rate, in line with section 138 of PA 2004.

I empathise with Mrs S’ position and acknowledge that she has suffered a loss of expectation of the Higher CETV. This is an unfortunate set of circumstances and is not of her own making.

I can only remedy financial loss where the loss is as a direct consequence of maladministration on the part of the respondent(s). On reviewing the evidence, I find that Mrs S’ perceived loss of the Higher CETV was ultimately due to the operation of the PPF regulations rather than excessive delays in facilitating the transfer.

The complaint justifies a finding of maladministration to the extent that Mercer misinformed the IFA that the transfer payment had been authorised. I note that the Trustee and Mercer subsequently misinformed Mrs S that the transfer could not be completed because the Scheme had entered an Assessment Period, which likely contributed to Mrs S’ distress.

I find that the Offer adequately remedies the injustice caused by the maladministration and is in line with what I would direct for non-financial injustice in similar cases. Mrs S should contact the Trustee if she wishes to accept the Offer.

I do not uphold Mrs S’ complaint.

Anthony Arter

Pensions Ombudsman 22 August 2022

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