Prudential was wrong to block a transfer to a pension scheme it suspected of being a vehicle for a pension liberation scam, the Pensions Ombudsman says.
It upheld a complaint from Mr Mark Harrison who said Prudential had refused to act on his request to transfer from a Prudential scheme to the Cheshire Food Services Pension Scheme, a SSAS.
Prudential has been ordered to make the transfer value plus interest.
The Ombudsman ruled that the provider did not undertake an adequate investigation before deciding to block the transfer.
Harrison requested a transfer in 2013 but Prudential did not act on his wishes and only provided the reasoning behind its decision when Harrison enquired why the transfer had not been made.
Prudential admitted it should have explained why it refused the transfer and said it had concerns because Harrison was under the age of 55 and the administrator Active SSAS and the Cheshire Food scheme were only recently registered as a company and with HMRC respectively.
However Ombudsman Tony King said Prudential should not have assumed the Cheshire scheme was suspect and that it was not Harrison’s responsibility to prove his right to a transfer.
He says: “In my view, reflecting the different balance of power between the parties, Prudential needed to satisfy themselves that he did nothave a right to the transfer.”
Yesterday, Money Marketing reported how the Ombudsman had sided with L&G and Scottish Widows who were accused of acting negligently by allowing a member to transfer to a suspect scam scheme.