Legal And General Personal Pension Scheme · CAS-76635-M4T9

CAS-76635-M4T9

Ombudsman’s Determination Applicant Mr N

Scheme Legal and General Personal Pension Scheme (the Scheme)

Respondents ReAssure

Outcome

Complaint summary

Background information, including submissions from the parties

On 17 January 1991, Mr N became a member of the Legal & General Personal Pension Scheme administered by Legal & General Assurance Society Limited (referred to, together with its successors including ReAssure, as the “Scheme Administrator”).

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On 8 October 2013, the Scheme Administrator sent Mr N a letter informing him that it had received a request for policy details from the IFA which it would action unless instructed not to do so within seven working days.

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On 16 October 2013, the Scheme Administrator sent the policy details and forms to the IFA.

On 8 April 2014, after seeking financial advice, Mr N received a recommendation letter from Global Partners Limited who appear to be a Gibraltar based regulated financial advice provider. The recommendation letter stated the following:-

“Given your desire to pass funds onto your beneficiaries and the greater investment choice, I believe the transfer to a QROPS is right for you.”

…

“… a QROPS allows you to ensure benefits are passed onto your beneficiaries (at a low tax cost), allows you to potentially increase the tax-free lump sum you could receive, allows you to retire earlier than normal retirement date of your existing scheme, allows you control over the investment strategy (rather than trustee control), alleviates any concerns you may have over the insolvency of the existing scheme and affords you additional flexibility should you consider moving abroad.”

…

“By transferring your pension benefits to a QROPS you can provide greater flexibility and reduce any potential tax liability. On death, the fund can be taken as a lump sum which is not liable to UK tax… you can also reduce your liability to income tax.”

…

“Gibraltar is one of the world’s leading jurisdictions for QROPS business and the jurisdiction, its policy markers and industry, are determined to maintain that position by offering well regulated, compliant and prudent QROPS products.”

…

“Other jurisdictions and providers were considered… however due to the competitive charging structure offered by the provider and favourable jurisdiction, Gibraltar and STM were preferred.”

…

“STM Group are a listed company who are one of the first multi-jurisdictional QROPS providers. They have worked closely with HMRC, Gibraltar FSC and the Malta FSA to produce QROPS products that will stand the test of time and meet regulatory changes. They are at the forefront of developing best practices in the administration and service delivery of QROPS.”

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On 5 September 2014, the Scheme Administrator received a declaration from the Receiving Scheme which confirmed the schemes identification number issued by HMRC which was supported by its original registration letter previously provided.

On 29 September 2014, the Scheme Administrator requested proof of identification from Mr N.

On 9 October 2014, the transfer was processed and the following day the Scheme Administrator sent confirmation to the Receiving Scheme for the transfer amount of £39,294.31.

4 CAS-76635-M4T9 On 10 October 2019, the Scheme Administrator provided its response to the FRS. It stated the following:-

On 16 October 2019, the Scheme Administrator sent a letter to the FRS with the notional transfer value calculation from its actuarial team. Two approximate values were provided as follows:

On 22 October 2019, the Scheme Administrator sent the FRS a letter in acknowledgement of the complaint and stated that it would be investigated.

On 31 October 2019, the Scheme Administrator provided its complaint response to the FRS. It stated the following:-

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Adjudicator’s Opinion

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

7 CAS-76635-M4T9 Mr N’s additional comments The Scorpion Leaflet was not made available to him and there was no attempt by the Scheme to contact him directly or to raise any concerns regarding the proposed transfer. If he had been sent the Scorpion Leaflet he would have cancelled the transfer.

Both of his transfers to the Receiving Scheme were transferred at around the same time.

The Scheme should have made sure that all information regarding QROPS and pension scams was available to him.

Adequate due diligence was not carried out.

Ombudsman’s decision

I have considerable sympathy for Mr N, who appears to have been the victim of pension liberation fraud. However, this matter cannot be viewed with the benefit of hindsight, and it is the circumstances and specific facts at play at the time of the transfer which must be considered.

I should also clarify that, unlike the Financial Services Ombudsman who may determine complaints according to what is “fair and reasonable” and having regard to the Financial Conduct Authority’s Principles, it is well settled that I must decide disputes in accordance with established legal principles rather than by reference to what I may consider to be fair and reasonable (Henderson v Stephenson Harwood [2005] Pens LR 209), save in relation to awards for distress and inconvenience.

As the Adjudicator explained, Mr N had a statutory right to transfer which he exercised by completing the transfer forms. So, the extent to which the Scheme could delay/stop the transfer was limited. The Scheme Administrator had a statutory obligation under section 95 of the Pension Schemes Act 1993 (the “1993 Act”) to pay the transfer in accordance with the transfer forms. It did not have an option to agree or not agree to make the transfer. It carried out the necessary due diligence according to the guidance in place at the time of Mr N’s transfer. The Scheme Administrator checked that the Receiving Scheme was on the HMRC list of QROPS, that it was authorised in its own jurisdiction and that Mr N had completed the relevant forms and provided the relevant identification proof.

The Scheme Administrator was not made aware of any red flags present at the time so it would not be reasonable to have expected the Scheme to make direct contact with Mr N or to make any further enquiries.

8 CAS-76635-M4T9 ReAssure cannot confirm whether or not Mr N was issued the Scorpion Leaflet. I understand Mr N’s claim is that he was not. I will not repeat the Adjudicators findings on this, which I agree with. I am of the view that if the Scorpion Leaflet was not issued this did not result in Mr N making a transfer that he otherwise would not have done. On the balance of probabilities, the transfer would have gone ahead as it did. I would also add that there was no legal duty on ReAssure to issue the Scorpion Leaflet.

It is not the responsibility of the Scheme Administrator to advise a member on their transfer or any other financial decisions. The obligation of the Scheme Administrator is to comply with its statutory obligations in giving effect to any exercise by a member of their statutory transfer right under sections 94 and 95 of the 1993 Act. The member is responsible for their own personal financial decisions. In the absence of any legal requirement to do so, it is also not the Scheme Administrator’s responsibility to ensure that financial advice is received from a regulated advisor.

Therefore, I do not uphold Mr N’s complaint.

Camilla Barry

Deputy Pensions Ombudsman

26 March 2025

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