Prudential Personal Pension Plan · CAS-45689-F6H6

CAS-45689-F6H6

Ombudsman’s Determination Applicant Ms N

Scheme Prudential Personal Pension Plan (the Plan)

Respondent The Prudential Assurance Company Ltd (Prudential)

Outcome

Complaint summary

Background information, including submissions from the parties and timeline of events 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.

On 12 December 2018, Ms N telephoned Prudential concerning a possible transfer from the NG Scheme to it. Prudential’s call handler explained that it could not accept the transfer without evidence of financial advice having been received. The call

1 CAS-45689-F6H6 handler notified Ms N that Prudential Financial Planning (PFP) could provide this advice, but it was her choice who to appoint in this role.

• PFP wrote to Ms N enclosing the Report which recommended that the transfer be invested in the Plan.

• Ms N signed Prudential’s transfer application form indicating that she wanted the transfer value to be invested in a with-profits fund. The destination policy number shown on the form was that of the Plan. The form included the declaration:

“I authorise and instruct you to transfer sums and assets from the plan(s) as listed in Part C directly to Prudential …”

• PFP wrote to Prudential requesting that it arrange the transfer from the NG Scheme to the Plan. It enclosed the necessary documentation.

2 CAS-45689-F6H6

“Please email all information regarding all pensions I hold with you, to the receiving scheme PensionBee.”

3 CAS-45689-F6H6

• She wanted the amount that had been transferred to the Plan from the NG Scheme to be transferred to PensionBee. This was only part of her funds in the Plan.

• The MVR should not be applied to the transfer value as she had not provided her approval for the money to be invested in the Plan.

• She wanted information on how details of one of her other policies had been shared with PensionBee.

Ms N said that she was forced to use a financial adviser.

4 CAS-45689-F6H6 Prudential did not uphold this part of Ms N’s complaint. It referred to the telephone call on 12 December 2018, during which it explained to Ms N that it required evidence of her receiving financial advice before it could accept the transfer. It said that it had told her that it was her decision who to obtain this advice from, and it had confirmed that PFP could provide this service.

Prudential said that it had made a business decision to only allow transfers to pension policies like the Plan through a financial adviser.

Ms N said that she was forced to contact her solicitor.

• Difficulties she had in making contact with Prudential, including a number of unsuccessful attempts to contact it by telephone, and it ignoring her requests for information. She was only able to take 20-minute breaks from her work and this was not enough time for someone to answer her calls.

• Delays in completing the transfer had caused her a financial loss which had been compounded by the impact of COVID-19.

• She had been told by a third party that the funds transferred from the NG Scheme had not been invested in a pension scheme and she would not be able to transfer them out in the future.

• She had not provided a final approval for the transfer to proceed, having been given the final transfer value figures. So, the transfer had completed without her consent. In addition, she had not confirmed that she wanted the transfer funds invested in the Plan.

In response, Prudential said:-

• It acknowledged that its service fell short of what Ms N should have expected to receive.

• In a response to one of Ms N’s complaints, it had provided her with a personal direct dial number, which included voicemail. It had also provided a department number together with details of its working hours. It could find no evidence of her having left a voicemail message. It had also checked for incoming telephone calls from Ms N’s number. It asked for the date and time of her calls and the number the calls were made from.

5 CAS-45689-F6H6 • It was unable to find evidence of it not responding to any of Ms N’s enquiries. It asked her to provide copies of any of her queries that were not answered.

• PFP had explained to Ms N that the process of transferring benefits due to a PSO was complicated and could take some time.

• There had been no financial impact or loss of funds as a result of any delays.

• Pension investment performance is influenced by a number of factors. COVID-19 was unforeseen and affected markets worldwide, some falling 25%. The investments underlying Ms N’s funds in the Plan were with-profits which offered her some protection against bad market conditions but did not protect against every eventuality.

• It had considered Ms N’s comment that she had been told by a third party that her funds were not invested in a pension scheme. It assumed that she received this information from PensionBee as a result of the confusion over which of her policies she was attempting to transfer from.

• In response to Ms N’s comment that she never signed a final approval for the transfer to proceed, she would need to contact NGPS concerning this as it was responsible for making the transfer payment.

• She had telephoned it to say that she had been awarded Mr N’s share of his pension benefits and had asked if it was possible to transfer it to her pension plan. The telephone number she called was one that Prudential used to deal with enquiries relating to the Plan.

• The Report provided a recommendation that the transfer value from the NG Scheme be invested in the existing Plan, which she had accepted. The Report stated: “You wish to invest the pension within your existing Prudential With Profits Pension which offers the potential of smooth returns which keep pace with inflation.”

Ms N said she was told by NGPS on 17 October 2019, that the transfer had taken place. She said she requested confirmation of this from PFP on 3 November 2019 and that she did not receive a response until 21 November 2019. So, for three weeks, she was concerned about the location of her funds, and this had caused her distress.

Prudential confirmed that it had received the funds on 25 October 2019. It acknowledged that the delay in notifying Ms N was poor service.

Ms N said:-

6 CAS-45689-F6H6 • She had completed Prudential’s cancellation form twice within the cooling off period. However, it had not returned the transfer monies to the NG Scheme.

• Her main reasons for wanting to cancel the transfer were Prudential’s delays and omissions during the transfer process and the increase in the transfer value from that quoted in the Report.

• Prudential had never explained to her that her right to cancel the transfer was dependent on a third party.

Prudential explained that:-

• While it was willing to reverse the transfer, NGPS was not willing to accept the returned funds. So, it was unable to comply with Ms N’s instructions.

• The reason that Ms N had been forwarded a second cancellation form was that the first form showed the higher, incorrect, fee rate for the advice she had received from PFP.

• If NGPS had been willing to accept the transfer reversal, the fee Ms N paid for advice would have been returned to her in accordance with its cooling off process.

Sharing of details of Ms N’s other Prudential policies with PensionBee

• She questioned why she had not been immediately notified of the data breach. She only became aware of it when PensionBee notified her that her funds were not invested in a pension scheme.

• She refuted the fact that, because PensionBee must adhere to data protection laws, this had mitigated the impact on her.

• She understood that Prudential had referred itself to the ICO and requested more information in relation to this.

• Three other policies that she had with Prudential were also mentioned in a letter from Prudential to PensionBee dated 17 January 2020, which also quoted a total fund value for these policies.

In its responses Prudential said:-

• On receipt of PensionBee’s request of 29 November 2019, Prudential set up a work item to provide policy details. This work item correctly included the Plan, but also incorrectly included one of Ms N’s non-pension policies. Details of both policies were duly sent to PensionBee. It apologised for this error.

• It should have been explained more clearly to Ms N that this data breach had been identified and investigated internally on 2 March 2020. It had notified her of 7 CAS-45689-F6H6 the data breach during a telephone call on 30 March 2020. It had not reported the breach to the ICO.

• It did not hold a copy of a letter to PensionBee dated 17 January 2020.

• It had written to PensionBee asking it to delete any information it had received relating to her non-pension policy.

The accidental deletion of some data from Ms N’s file

Ms N said that, if the LOA that was deleted was the one provided by NGPS that her solicitor passed to her, then she considered Prudential’s response to be inaccurate as it had not come from PFP.

Ms N’s request to transfer her funds to PensionBee

• Prudential had not actioned her request to transfer her funds in the Plan to PensionBee.

• After speaking to PensionBee, she was worried that her funds had been lost. She had tried to contact Prudential by telephone to obtain an update but had been unable to make contact with it.

• She was unhappy that the transfer value from the NG Scheme had been added to one of her existing policies. This meant that she could no longer transfer just the funds from the transfer to PensionBee. This had not been explained to her in the advice that she had received from PFP.

• When sending details of the Plan and one of Ms N’s non-pension policies to PensionBee, it had made it clear which of the policies related to a pension and which did not. However, when PensionBee telephoned it on 28 January 2020 to ask for transfer forms, it quoted the policy number for the non-pension policy. When informed that the policy it had asked about was not a pension policy, PensionBee said it would investigate and get back to Prudential.

• Ms N’s funds remained in the Plan.

• A partial transfer of Ms N’s funds under the Plan was not possible.

8 CAS-45689-F6H6 • All the details she held concerning the non-pensions policy were at her father’s residence. She would not have been able to have given PensionBee the policy number for this policy. Someone from Prudential must have supplied it.

• Had the confusion over the account from which the funds were to be transferred been referred to her at the time, she could have addressed it.

Ms N said that she was not aware until 31 March 2020 that an MVR of £14,618.55 would be applied to her transfer value from the Plan. MVRs were not discussed during her meetings with PFP, and she could not afford to lose this amount of money.

“If you transfer at your selected retirement date (or revised retirement date […]), then the transfer value will be the value of your fund. If you transfer at any other date, then the Prudential reserves the right to make a deduction from the value of your fund.”

“When we might apply a Market Value Reduction We might apply a Market Value Reduction (MVR) if you were to move money out of our With-Profits Fund. It is designed to protect investors who are not taking money out and its application means that you get a return based on the earnings of the With-Profits Fund over the period your payments have been invested. We apply the MVR to your Plan value, including any regular and final bonuses and, if applied, this will reduce the value of your plan.”

9 CAS-45689-F6H6

• on 9 January 2020, a payment of £300.46. £300 of this was in recognition of delays and poor service she had encountered across a number of her policies with Prudential, including the Plan;

• on 2 March 2020, a payment of £100. This was in recognition of the fee for the advice she received from PFP having been incorrectly calculated and information being sent to PensionBee relating to a policy that was not relevant to her transfer;

• on 4 December 2020, a payment of £100 in recognition of the lack of clarity in relation to the data breach; and

• on 12 February 2021, a further payment of £150 in recognition of the overpayment of the fee for the advice she had received from PFP.

Adjudicator’s Opinion

10 CAS-45689-F6H6

11 CAS-45689-F6H6

Sharing of details of Ms N’s other Prudential policies with PensionBee

12 CAS-45689-F6H6

The accidental deletion of some data from Ms N’s file

Ms N’s request to transfer her funds to PensionBee

13 CAS-45689-F6H6

• that information was sent to PensionBee relating to a policy that was not relevant to Ms N’s transfer request; and

• that there had been a lack of clarity in relation to the data breach.

I agree with the Adjudicator’s Opinion.

Ombudsman’s decision

14 CAS-45689-F6H6

Anthony Arter CBE Deputy Pensions Ombudsman

18 May 2024

15